Budget 2024: These stocks and sectors are likely to gain from announcements

Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget 2024 in July 2023 and the government is expected to strike a balance between fiscal deficit management, capital expenditure for economic growth and social spending, according to brokerage firms such as JM Financial.

The expected continuation of the current capital expenditure programme, increased budget allocations for the rural economy and an action plan for a ‘Viksit Bharat’ by 2047 are the key themes of this much-awaited event.

That’s why investors are closely monitoring any potential changes to capital gains tax on stocks.

Analysts believe that if there are no adverse developments, it will be seen as a positive sign for the stock market.

Read the full report on the 2024 budget

JM Financial also highlighted several stocks that are likely to be in focus ahead of the Budget.

These include Mahindra & Mahindra Ltd, Hero MotoCorp Ltd, ITC Ltd, Sumitomo Chemical India Ltd, Reliance Industries Ltd, Power Grid and NTPC Ltd.

Other notable stocks in the JM Financial Budget list include Sanghvi Movers Ltd, Bharat Electronics Ltd, Bharat Forge, VA Tech Wabag Ltd, Larsen & Toubro Ltd, DLF Ltd, Ambuja Cements Ltd, APL Apollo, PFC and IRCON International Ltd.

FMCG sector

Any potential tax cut, widening of tax brackets or increase in the limit of tax-saving investments under Section 80C would likely increase disposable income, benefiting FMCG companies such as Dabur India, Hindustan Unilever (HUL), Godrej Consumer and Nestle India.

On the other hand, increasing excise duty or Natural Disaster Causing Cess (NCCD) on cigarettes and tobacco products would have a negative impact on cigarette manufacturers such as ITC and Godfrey Phillips.

Renewable energy and usable space

In the utilities sector, increased incentives are expected to use renewable energy sources, in line with the target of 500 GW by 2030.

Potential measures could include more break-even funding for battery storage, offshore wind and solar, which would benefit companies like NTPC, Tata Power Company Ltd, JSW Energy, Adani Power and CESC. Energy ancillaries like Suzlon Energy, Inox Wind and Sterling & Wilson would also benefit from such announcements.

Moreover, any move towards rooftop solarization will benefit Tata Power, Borosil Renewable and Waaree Renewables. Greater focus on transmission and distribution (T&D) capex should benefit Power Grid.

Defense, Railways and Infrastructure

Increased capital expenditure for defence would have a positive impact on players like Bharat Electronics (BEL) and Hindustan Aeronautics (HAL).

Higher capital expenditure on railway infrastructure would benefit companies like RVNL, Titagarh Rail Systems, IRCON and BEML.

Any increase in infrastructure capital expenditure would benefit KNR Constructions, PNC Infratech, RITES and Ahluwalia Contracts.

Water and housing projects

More funds earmarked for major water projects like Jal Jeevan Mission, Nal Se Jal and Inland Waterways Development could favour NCC, VA Tech Wabag, Finolex Industries, Ratnamani Metals and Welspun Corp.

Moreover, hopes are pinned on an increased budget for the PMAY scheme, which aims to build 20 million houses in villages over the next five years, in addition to the recent Cabinet decision to build 30 million flats for the urban and rural poor.

Beneficiaries of this scheme could be UltraTech Cement, Ambuja Cements and Dalmia Bharat. Separate tax deduction limit for life insurance could be beneficial for LIC.

(Disclaimer: The views, opinions, recommendations and suggestions expressed by the experts/brokers in this article are their own and do not reflect the views of India Today Group. It is advisable to consult a qualified broker or financial advisor before taking any actual investment or trading decisions.)