Budget 2024: Dabur, RVNL, L&T, Tata Motors among 18 stocks picked by MOSL across sectors amid budget expectations

The Union Budget 2024, which will be announced later today on July 23, is expected to be growth-oriented and include a slew of measures to strengthen the rural economy, brokerage Motilal Oswal said in a pre-budget note.

The brokerage said the government is likely to continue to emphasize capital expenditure and investment-led growth, alongside initiatives to revive consumption. The tax revenue and non-debt capital projections presented during the February 2024 interim budget are expected to be maintained, it added.

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This budget will be particularly significant as it marks the first budget after the 2024 general elections. Although the BJP remains in power, it no longer has a majority on its own, making this budget highly anticipated and closely watched.

The brokerage house has published a list of 18 stocks from various sectors that are expected to be in the spotlight today. Let’s take a look at them:

Capital goods and infrastructure:L&T, Siemens and NTPC

Defense and Railways:Bharat Electronics (BEL), Hindustan Aeronautics (HAL) and Rail Vikas Nigam Ltd (RVNL).

Rural:M&M, Supreme Industries and Dabur

Production:Tata Motors, Kaynes Tech and Exide Industries

Real Estate, Cement and Building Materials:Godrej Properties, KEI Industries and Ambuja Cement

Power supplies:GAIL, SBI and HUDCO.

Apart from these major stocks that were highlighted, the broker also highlighted that one of the important aspects is the Reserve Bank of India’s move ₹2.11 lakh crore, which translates to a revenue surplus of around ₹1.5 lakh crore for fiscal 2025. MOSL expects a significant portion of this additional revenue to be used for miscellaneous expenditure, with a smaller portion potentially being used to reduce the fiscal deficit.

Key allocations and adjustments include:

Reduction of fiscal deficit:MOSL expects an estimated ₹An amount of Rs 30,000-40,000 crore could be used to reduce the fiscal deficit to 5 per cent of GDP, down from 5.1 per cent of GDP announced in the interim budget.

Loans for capital expenditure: Other ₹Loans to the tune of Rs 30,000-40,000 crore could be provided to states for capital expenditure, which would increase the Centre’s overall capital expenditure, it said further.

PM-KISAN InstallmentsIt is also estimated that the instalments under the PM-KISAN scheme could be increased by 50 per cent ₹9000 per year, which would involve additional cost ₹30,000 crores.

Taxpayer incentives:The remaining ₹Rs 50,000 crore could be earmarked for additional incentives under housing or other schemes to encourage taxpayers to switch to the new tax regime, the brokerage firm added.

Over the past decade, the BJP has carved out an image of a clean government, focusing on minimizing wasteful spending and corruption. This has been achieved by making the budget more transparent, reducing off-budget spending and borrowing, leading to a higher allocation of capital expenditure and maintaining fiscal prudence. MOSL expects this philosophy to continue, ensuring policy continuity.

However, coalition politics could create challenges in passing legislation for more ambitious government reforms in areas such as agriculture, land, labour and the judiciary, which typically fall outside the scope of the budget, it said.

Disclaimer: The views and recommendations presented above are those of the individual analysts or brokerage firms and not Mint. We recommend that investors consult certified experts before making any investment decisions.