Infra, manufacturing, and FMCG could see positive momentum with the budget announcements
The upcoming Vote on Account Interim Budget 2024 is a pivotal event for investors. Key expectations include a continued focus on fiscal consolidation to maintain investor confidence and long-term economic stability.
“During the interim budget, sectors likely to be in focus include infrastructure, agriculture, banking and finance, and renewable energy. Infrastructure-related companies, particularly in construction, cement, and steel, could benefit from increased government spending. Agriculture initiatives might uplift related companies, while public sector banks could gain from government projects. The focus on green energy could also benefit renewable energy companies, aligning with global environmental goals,” said Sonam Srivastava, Founder and Fund Manager, Wright Research.
The expectations for Budget 2024 seem to revolve around the belief that it won’t be significantly impactful due to its proximity to the election year.
“Instead, the focus is on analysing the budget from February 2023, which prioritised capital expenditure over popular measures to woo voters. This strategy is seen as crucial for a nation’s prosperity, as capital investments yield benefits over a longer period, in contrast to immediate, short-term gains from revenue expenditure,” said Anirudh Garg, Partner and Fund Manager, Invasset.
The argument is that investing in long-term assets, much like a family investing in a business for future income, is critical for a developing nation like India. While the current budget might not bring substantial changes for the stock market and investors, any important announcements will still be noted and considered for their potential impact, added Garg.
“Anticipating the interim and full budget, we foresee a sustained emphasis on growth and infrastructure. The impending general elections may prompt populist announcements, shaping a positive trajectory for sectors such as infrastructure, manufacturing, and FMCG. The budgetary focus on these areas is expected to fuel momentum, aligning with broader economic objectives,” said Divam Sharma Founder and Fund Manager, Green Portfolio.
We expect the growth and infrastructure focus to continue in the interim and full budget. Also, some populist announcements considering the upcoming general elections. Infra, manufacturing, and FMCG could see positive momentum with the budget announcements, added Sharma.
“The interim union budget will be presented ahead of the general elections and the full budget will be presented later. Since political continuation is expected at a broader level we expect the government to continue its focus on infrastructure to develop ports, airports, railways, and highways, all of which play a pivotal role in advancing the nation’s economic development. Additionally, investments in renewable energy and initiatives aimed at promoting financial inclusion, supporting growth and development,” said Anil Rego, CEO and Fund Manager, Right Horizons.
Reference Link:- https://www.businessworld.in/article/Energy-Infra-To-Fuel-Market-Sentiments-Budget-2024/27-01-2024-507856/