As Finance Minister Nirmala Sitharaman prepares to present her third Union Budget on July 23, 2024, investors and market analysts are closely watching for potential impacts across various sectors. With the Nifty hovering near 24,500 and having recently approached the 25,000 mark, expectations are high for announcements on capital expenditure, infrastructure development, and taxation reforms.
Top 5 Sectors and Stocks in Focus for Union Budget 2024
1. Infrastructure and Power Sector: Capitalizing on Public Expenditure
The government’s commitment to public capital expenditure is expected to remain strong, potentially benefiting key players in the infrastructure and power sectors.
| Top stocks to watch | Sector |
|---|---|
| Larsen & Toubro (L&T) | Infrastructure |
| Power Grid Corporation of India (Powergrid) | Power Transmission |
| NTPC Limited | Power Generation |
| Tata Power Company Limited | Integrated Power |
Key expectation: Increased allocation for infrastructure projects and power sector initiatives.
2. FMCG Sector: Boosting Rural Consumption
With rural India contributing approximately 35% to FMCG sales, budget allocations aimed at rural development could significantly impact this sector.
| Top stocks to monitor | Key Products |
|---|---|
| Hindustan Unilever Limited (HUL) | Personal care, Foods, Homecare |
| Marico Limited | Hair care, Edible oils |
| Britannia Industries Limited | Biscuits, Dairy products, Bakery |
| Dabur India Limited | Ayurvedic products, Personal care |
Key expectation: Higher rural spending to drive FMCG consumption growth.
3. Affordable Housing: New Subsidy Scheme on the Horizon?
Reports suggest a potential new Rs 60,000 crore interest subsidy scheme for urban poor and middle-class homebuyers, which could boost the affordable housing sector.
| Stocks in focus | Sector |
|---|---|
| Can Fin Homes Limited | Housing Finance |
| PNB Housing Finance Limited | Housing Finance |
| Home First Finance Company India Limited | Housing Finance |
Key expectation: Introduction of a 5-year interest subvention scheme offering 3-6% per annum on home loans up to Rs 50 lakhs.
4. Green Mobility: Driving the EV Revolution
The auto sector, particularly companies involved in electric vehicles (EVs) and hybrids, may see favorable policy announcements.
| Stocks to watch | Sector |
|---|---|
| Mahindra & Mahindra Limited (M&M) | Automobiles & Tractors |
| Bajaj Auto Limited | Two and Three-wheelers |
| TVS Motor Company Limited | Two-wheelers |
| Hero MotoCorp Limited | Two-wheelers |
| Tata Motors Limited | Passenger & Commercial Vehicles |
Key expectations:
- Announcement of FAME III scheme for hybrids and EVs
- Initiatives to expand EV charging infrastructure
5. Defence Sector: Focus on Modernization and Indigenization
Increased budgetary allocation for defence, with emphasis on modernization and indigenous production, could benefit several companies in this sector.
| Stocks in the spotlight | Specialization |
|---|---|
| Hindustan Aeronautics Limited (HAL) | Aerospace manufacturing |
| Bharat Forge Limited | Forging, Aerospace, Defence |
| Bharat Electronics Limited (BEL) | Defence electronics |
| Mazagon Dock Shipbuilders Limited | Shipbuilding |
| Paras Defence and Space Technologies Limited | Defence and Space optics |
Key expectation: Higher defence budget allocation supporting indigenization efforts.
Conclusion: Budget 2024 Impact on Stock Market
As Union Budget 2024 approaches, these sectors and stocks are likely to remain under intense scrutiny. Investors are anticipating policy measures that could drive growth and boost market sentiment. However, it’s crucial to remember that budget-related expectations can lead to short-term market volatility. Investors should conduct thorough research and consider seeking professional advice before making investment decisions based on budget announcements.
Stay tuned for comprehensive coverage and analysis of Union Budget 2024 and its impact on the Indian stock market.
