Which Stocks will Benefit from Budget 2024 in India: Top 10
The Union Budget for 2024 has been presented with a roadmap for making India the world’s third-largest economy within the next few years. This would not be possible without the growth of the companies operating in India. The government has proposed this budget with confidence and keeping in mind its role in the third innings after the General Election, which is likely to be held in April-May 2024.
The finance minister has included indications of upcoming reforms in the budget. We believe that the Indian economy and corporate sector will benefit from these reforms. In light of this, we have analyzed that companies that are focused on building the future have the best prospects of benefiting from the government’s push for post-election reforms.
We are confident that the new government will focus on key sectors such as manufacturing, infrastructure, digitalization, and defense. Additionally, we believe that trends such as premiumization in consumption, the capex upcycle, and green technology will continue to strengthen.
We have compiled a list of top ten stocks from various sectors that we believe will benefit from the budget 2024 and play a key role in the growth story of the Indian economy. These stocks are suitable for medium to long-term investments and can be considered for addition to your portfolio.
10 Stocks to get Benefit from Budget 2024:
#1 Reliance Industries (RIL CMP: Rs 2917)
Reliance Industries, the second biggest weight on the Nifty 50, stands to benefit from several budget announcements, especially the ones pertaining to green energy, battery and solar PLI schemes. According to Bernstein, Reliance may earn nearly $10-15 billion from its new energy business spanning solar to hydrogen by 2030.
However, stocks has moved around 10% in the last one month, and has been supporting the index and trading around Rs 2900, you can accumulate the stock around Rs 2800 levels.
#2 Larsen & Toubro (L&T CMP: Rs 3324)
India’s leading engineering and construction private sector company is sitting on a huge order backlog of Rs 4.7 lakh crore (about 3.8 times FY23 revenues). And with strong capex cycle and government spending is supporting L&T, providing strong growth visibility for the company.
The medium-term outlook remains reasonably good, thanks to improving margins, opportunities in the emerging sectors, revival in the service businesses and strong earnings growth. You buy the stock at current levels and can accumulate more if goes down in near future.
#3 State Bank of India (SBI CMP: Rs 725)
India’s largest bank public sector unit, state bank of India or SBI’s performance has improved in the past few years with ROA (return on assets) of around 1%. The bank will benefit from rising capital expenditure and a consequent pick-up in credit demand in the economy.
The bank’s investment book also stands to gain from the fall in yields. Given its leading position, improved return ratios and favourable asset quality cycle, SBI should command a better valuation. You can buy the stock around Rs 700, or accumulate around current levels.
#4 HDFC Bank (HDFCBANK CMP: Rs 1408)
Though India’s largest private sector lender has not expected big bang announcements in the budget for the banking sector, but HDFC Bank will be on the radar by the virtue of its sheer weight. As of December end, its weightages in the main index is around 13.52%, will further contribute in the movement of the market.
However, the stock will also be in focus as the finance minister Nirmala Sitharaman announces fiscal deficit targets for FY25. The Street expects fiscal deficit target for the next financial year at 5.3%. Furthermore, the stock can benefit from housing and MSME incentives as well. Hence you can buy the stock at the current levels and keep accumulating at every lower levels.
#5 Maruti Suzuki (MARUTI CMP: Rs 10710)
The India’s leading passenger vehicle manufacturer, Maruti Suzuki also stands to gain from incremental announcements related to auto PLI and FAME (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) schemes. You can buy the stock around Rs 10400 levels.
#6 UltraTech Cement (ULTRACEMCO CMP: Rs 9942)
The cement industry leader UltraTech Cement is going to play a significant role in the infrastructure formation and growth in the country. As the housing and infrastructure projects constitute over 80% of India’s cement demand. So, any boost to this sector will move the cement stocks as well.
Additionally, under the National Infrastructure Plan, the government has plans to enhance India’s infrastructure which will expedite highway projects. This is expected to increase demand for cement in the construction and development of such projects executed by the government. Though, in the past few months the stock moved around 30%, but still you can accumulate it around current levels.
#7 Life Insurance Corporation of India (LIC CMP: Rs 1084)
Life Insurance Corporation of India holds the leading market share in the life insurance sector, its performance lags private players. The insurer’s strategy is to improve its return ratios and it is also focusing on a product mix that can enhance margins. LIC is trading at a significant valuation discount to listed private peers and its current valuation gives an opportunity to invest buy at this levels.
#8 Sona Blw Precision Forging (SONACOMS CMP: Rs 618)
A midsize auto ancillaries maker with leadership in Electric Vehicles (EVs) and technology know-how, stands to benefit significantly from the upcoming opportunities in EVs, both in India and in the international markets. This strong financial performance and high operating margin should result in an industry-leading performance. You can accumulate the stock around Rs 590.
#9 VA Tech Wabag (WABAG CMP: Rs 685)
The company is benefiting from the strong capex cycle in the water and water treatment space, particularly in the domestic market. It is sitting on an order book of close to Rs 12500 crore or 4 times its annual revenue. Their strategy to move up the value chain, reduction in debt, focus on margins and strong order book should support higher earnings. You can buy it around Rs 660.
#10 Data Patterns (DATAPATTNS CMP: Rs 1882)
With a strong competitive edge in defence electronics and systems, Data Patterns is well positioned to tap growing opportunities in the defence market. Its robust execution and improving product mix are driving scale and margins. Besides, order flows remain strong and the current backlog at Rs 1000 crore, or two times annual revenue, provides good visibility. You can accumulate the stock at current levels.
Disclaimer: The views and investment tips expressed by investment experts here are their own and not those of the website or its management. And the movement of recommended stocks are subject to the movement of the main index or entire stock market. Hence, there is risk investing in the stock market, it is advised users to check with certified experts before taking any investment decisions.
