Infrastructure, rural development and health care are among stock analysts' top picks as the Indian government prepares to increase spending in the budget aimed at kickstarting investments to boost growth.
Construction spending on roads and ports, as well as incentives for electric mobility and renewable energy, are likely to be the focus of Finance Minister Nirmala Sitharaman's budget speech on Tuesday, as policymakers look for ways to help lift the economy out of malaise. seek. from the pandemic.
With India's equity benchmarks falling amid a recent global sell-off on concerns of the Federal Reserve's imminent rate hike and foreign funds fleeing the market, investors are hopeful that the Budget announcements will bring some respite.
That said, the benchmark S&P BSE Sensex has climbed in the month after Budget Day in only three of the past eight years, since Prime Minister Narendra Modi came to power in 2014. It fell or traded in the range on the other five occasions.
"The overall focus of the budget is likely to be on job creation and investment-driven growth, which encourages infrastructure development," Neeraj Chadavar, Head of Quantitative Equity Research at Axis Securities Ltd, wrote in a note. Include capital expenditure on public infrastructure for roads, water, metro, railways, defence, digital infrastructure and green technologies.
Multibagger Stocks of Union Budget 2022
Basic Infrastructure
A gauge of India's top-30 companies in roads, air, ports, shipping, railways and other utility services climbed 36% in 2021, its best gain since 2009, as the government was focused on creating and promoting jobs. continues to ignite public expenditure. Development. ICICI Direct expects the allocation to remain "buoyant" with higher spending on roads, defence, water, housing and railways.
Top picks : Polycab India, HG Infra Engineering, KNR Construction, PNC Infratech, Larsen & Toubro, Thermax, KEI Industries, ABB India, Siemens India, Ramco Cements, UltraTech Cement, ACC, Ambuja, Bharat Dynamics, Bharat Electronics, NTPC, Container Are included. Indian corporation
Renewable Energy/EV
Analysts expect support for electric vehicles and infrastructure development for green energy generation, in line with the government's focus on reducing emissions and reliance on fossil fuels.
“The emphasis is expected to be on sustainable technologies with some benefits aimed at accelerating the adoption of EVs in India. In addition, the EV charging infrastructure segment is expected to receive a boost to support further EV adoption,” according to Chadavar of Axis Securities.
Top picks : Maruti Suzuki India, Tata Power, Adani Green, Hero MotoCorp, Bajaj Auto, TVS Motors, Mahindra & Mahindra, Tata Motors, Minda Corporation, Gabriel India, Dixon Technologies.
Rural / Agriculture
Sell-off analysts expect continued support for farming and rural sectors through more support for food processing, higher farm credit along with production-linked incentives, and subsidies for fertilizers and crop protection. Consumer goods companies battling high input costs will benefit from increased agro-industry spending.
Goldman Sachs (India) Securities Pvt. Analysts led by Shantanu Sengupta wrote in a note.
Top picks : PI Industries, Dhanuka Agritech, Rallis, Godrej Agrovet, Hindustan Unilever, Britannia, Dabur and Nestle India.
Health Care/Pharma
Continuing its focus on strengthening health care infrastructure, the government has asked the government to increase spending on companies to boost production as well as tax relief for individuals who purchase health insurance, better access to medical care and drug research. A generous encouragement is expected for
Top picks : Apollo Hospitals, Narayana Healthcare, Shelby Ltd, Gland Pharma, Krishna Institute of Medical Sciences, Healthcare Global Enterprise, Max Health, HDFC Life, SBI Life and most drug makers.
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