Axis Securities anticipates that the upcoming Union Budget 2024 will strike a balance between capital expenditure (capex) and addressing rural challenges, buoyed by a higher-than-expected RBI dividend
The brokerage suggests that any deviation from market expectations, particularly concerning capital gains tax, could trigger short-term negative reactions in the stock market.
Key sectors and stocks likely to benefit from Budget 2024 announcements include:
BFSI:
The budget is expected to emphasize capital expenditure, with a focus on power and renewable energy sectors. Potential privatization of certain PSU banks may also be announced. Beneficiaries could include SBI, Bank of Baroda, Canara Bank, HDFC Bank, and ICICI Bank.
Infrastructure:
Focus is anticipated on key segments such as roads, railways, airports, and urban infrastructure. Companies like KNR Constructions, PNC Infratech, RITES, KEC International, J Kumar Infraprojects, and Ahluwalia Contracts are poised to benefit from increased allocations to infrastructure projects.
Cement:
Increased funding for rural infrastructure development and government schemes like PM Gram Sadak Yojna are expected to boost cement consumption. Companies like UltraTech Cement, Ambuja Cements, Dalmia Bharat, JK Cement, JK Lakshmi, and Birla Corp could benefit.
Auto & Auto Ancillary:
Rural-focused two-wheeler and entry-level four-wheeler makers, along with auto ancillary companies, are likely to benefit. Mahindra & Mahindra, Hero MotoCorp, Minda Corp, Sansera Engineering, Servotech Power, and Bosch are highlighted as potential beneficiaries.
Utilities & Power Ancillary:
The sector anticipates reductions in GST on renewable energy components and custom duties on imported components. Stocks such as NTPC Ltd, CESC Ltd, Tata Power Ltd, JSW Energy Ltd, Inox Wind, Suzlon Energy Ltd, Sterling & Wilson Renewable Energy, Power Grid, and Jyoti Structures could gain from budgetary allocations.
Real Estate:
Expectations are for initiatives related to PMAY-HFA and digital infrastructure enhancement. Companies like Prestige Estates, Macrotech Developers, Godrej Properties, MICL, and TARC are seen as favorable picks.
The brokerage underscores the importance of a sustainable roadmap in the PLI space, particularly for MSMEs, and anticipates supportive measures for the transition to sustainable energy sources.
Source: Business Today
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