The biggest beneficiaries would be the infrastructure segment, capital goods, real estate, railways, power, fintech, agriculture, defence and banks, say experts. One of them said the Budget will be negative for the entire PSU and PSU bank space since there were no major announcements on divestments.
Experts largely feel the government maintained its focus to get the economy back on a strong track and speed up growth, extending focus on existing schemes, as its intention continued to boost the ‘Make-in-India’ initiative by focusing on infrastructure, housing, power, railways, employment, agriculture, digitisation through new-age technologies, electric vehicles etc.
The Centre has increased capital expenditure by 35 percent to Rs 7.5 lakh crore to boost infrastructure projects, while hoping to maintain fiscal deficit at 6.4 percent (from 6.9 percent in the current fiscal), but kept less focus on populist measures, despite impending state elections.
The biggest beneficiaries would be the infrastructure segment, capital goods, real estate, railways, power, fintech, agriculture, defence and banks, experts feel.
“The government is now extremely focused on ensuring that the private capex cycle picks up speed. The focus on creating a virtuous growth cycle for the next 25 years is really remarkable. There were no negative surprises. Instead, the FM focused on minor tweaks to ensure that the private sector and investors are more confident about making long-term investments,” says Abhay Agarwal, Founder and Fund Manager, Piper Serica.
He rated the Budget at 4+ (out of 5) as it sticks only to providing policy guidance and a clear statement of intent.
Therefore, the clear winners are builders of roads and ports, and segments like steel, cement, and providers of project finance, he says. The other winners are renewable energy, biofuels, healthcare, education, and financial tech. “Large projects that generate huge employment will find it easier to get funding and approvals.”
Here are 41 stocks suggested by experts after the budget:
Also read – Brokerages say Budget 2022 good for growth, bad for equity valuations
Expert: Siddhartha Khemka, Head, Retail Research, Motilal Oswal Financial Services
Larsen & Toubro: The Budget has raised allocation for capital expenditure to Rs 7.5 lakh crore in 2022-23, up from Rs 5.5 lakh crore in 2021-22. The government believes public investment will be necessary to support private investment, which will, in turn, create demand. This will be positive for L&T. It remains the best play on capex cycle in India.
UltraTech Cement: The budget has allocated Rs 48,000 crore for a housing plan, including affordable housing in urban and rural areas. UltraTech is in a strong position to gain market share, led by its strong distribution network, given the government’s thrust on infrastructure development and the recent improvement in housing demand.
DLF: The government announced the completion of 80 lakh homes by 2023 under the Pradhan Mantri Awas Yojana and allocation of Rs 48,000 crore under PMAY for urban and rural areas. These announcements are expected to boost the affordable housing market. This is positive for DLF, given its strong momentum in both sales bookings and deal additions.
Also read – Daily Voice | Lack of direct measures to alleviate stress on rural regions and urban poor missing in Budget 2022
Bharti Airtel: India will auction airwaves for 5G network by 2023. The government has announced fund allocation for faster broadband reach in rural areas. Bharti’s superior execution quality and consistent subscriber and revenue market share gain will benefit the company.
IRCTC: India will run 400 new, energy-efficient Vande Bharat trains in three years. The railway sector will also see 100 Gati Shakti cargo terminals, which will be developed in three years. With an eye on farmers, the rail sector will also develop the ‘one station, one product’ plan, which will leverage local produce carried on the railways. This is positive for IRCTC.
Can Fin Homes: The budget has allocated Rs 48,000 crore for a housing plan, including affordable housing, in urban and rural areas. Can Fin has a strong presence in the small and affordable housing space, and has a healthy balance sheet. We expect it to be a big beneficiary.
Bharat Electronics: The government has announced 68 percent capital for the defence sector to be allocated to the domestic industry in 2022-23. It also set aside 25 percent of its budget in defence research and development (R&D) for collaboration with the private industry. BEL is well-positioned to benefit from the rising defence expenditure, aided by a strong manufacturing base and execution track record, relationship with defence and government agencies, in-house R&D capabilities, and higher focus on exports to friendly countries.
Expert: Abhay Agarwal, Founder and Fund Manager at Piper Serica
Also read – Capital goods, metals, cement beneficiaries of Budget 2022, says Deepak Jasani of HDFC Securities
Positive for:
Large banks and NBFCs: HDFC Bank, SBI, ICICI Bank, and Bajaj Finance
Capital goods, infrastructure, and cement companies: UltraTech Cement, L&T, ABB, Thermax
Housing finance companies: HDFC, Can Fin Homes
Healthcare: Apollo Hospitals
Tech-based jobs and consumer tech: Info Edge and Zomato
Biofuel: Globus Spirits and Praj Industries
Electronics / EMS: Dixon Technologies and Amber Enterprises
Negative for: The entire PSU and PSU bank space since there were no major announcements on divestments. At the same time, with a clear preference to private players, the competition will further increase for inefficient PSUs.
Expert: Anuj Jain, Co-founder and Research Head, Green Portfolio
About 68 percent of capital procurement budget for defence will be earmarked for the domestic industry in 2022-23, up from 58 percent in 2021-22. The key players to watch out for are Adani Enterprises (for their guns/rifles units and aerostructure unit), and Titagarh Wagons (for their shipbuilding unit which executes orders from the Navy and the Coast Guard.)
400 new generation Vande Bharat trains in three years: Titagarh Wagons is into making metro coaches. It is the only listed entity manufacturing metro coaches.
Five detailed project reports (DPRs) for river-linking have been finalised. It’s big for players like KNR Constructions.
Bharatnet project (Contracts to connect all villages and remote areas in 2022-23 with the target year at 2025): Vindhya Telelinks and Sterlite Technologies are potential beneficiaries.
Expert: Sonam Srivastava, Founder, Wright Research
The biggest gainers, post budget, will come from infrastructure-linked sectors and new-age companies: Container Corporation of India, IRB Infrastructure, L&T, Dilip Buildcon, Allcargo Logistics, Oberoi Realty, India Cements, UltraTech Cement, Honeywell Automation, Tata Steel
Electric vehicles / Renewables: Tata Power, Amara Raja Batteries, Borosil Renewables, Adani Green Energy
Digital, Edtech, Fintech: NIIT, Policybazaar, Paytm (One 97 Communications)
Expert: Raamdeo Agrawal, Joint MD, Motilal Oswal
“The banking system will get good support on low credit cost and good credit offtake. PLI (production-linked incentive) schemes for exports will be the theme to watch out for. Here, we can find some stock ideas,” Raamdeo Agrawal of Motilal Oswal said in an interview to CNBC-TV18.
“Overall, the budget is not giving any thrust to any particular company. If about 8-8.5 percent growth is there, there would be lot of opportunities. I will stick to winners of the last 12 months for the next 12 months as well,” he said.
Expert: Madhu Kela, Founder of MK Ventures
“I will continue with my investment themes like manufacturing (from India), the Atmanirbhar Bharat theme and the expected export opportunities from the China+1 theme, and also cyclical opportunities,” Madhu Kela, Founder of MK Ventures, said in an interview to CNBC-TV18.
“The increased capital expenditure of Rs 7.5 lakh crore will bring investments and jobs. So, I am extremely optimistic and I am going with a growth target of more than 8 percent. I think the government needs to think about revenue assumption, which is more conservative, as there is more space to support the weaker sections of the economy,” he said.
Disclaimer: The views and investment tips by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decision.
