Stocks to buy before budget: Indian stock market remained volatile last week with major up and down. Sensex and Nifty 50 touched the record level highs last week. There are a lot of anticipations in wide range of sectors in the upcoming union budget 2024, to be tabled on Tuesday, July 23 by Finance Minister Nirmala Sitharaman. Capex expenditure, railway, infrastructure, power and health are some of the sectors that may see a large allocation of budget. Investors are keenly awaiting the budget announcements with high hopes. Selective stocks of some sectors such as railways have become skyrocket in recent times, touching their all-time high levels ahead of the budget.
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The brokerage firm Stoxbox has recommended budget stocks that may get benefits due to budget announcements. The brokerage expects infrastructure will continue to be the main focus with the capex driven growth led by Housing, Defence, Railways, Renewable, and Power. “We are of the view disinvestment target will be kept realistic but sincere efforts will be made to monetize in this stock market rally through OFS in PSUs at right prices and right time and strategic sales in PSUs like SCI or Concor will be undertaken in coming few quarters,” the brokerage adds.
The deficit, the brokerage adds, will be managed prudently with assumption of 11% nominal GDP growth and resultant growth in GST and Income tax collection plus RBI Cheque of Rs 2.11 lakh crore, offering cushion on fiscal front.
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Stocks to buy ahead of the Budget 2024:
1) Larsen & Tourbo (CMP 3636 , target 4400)
2) Ambuja Cement (CMP 685, target 800)
3) Jyothy Labs (CMP 493, target 575)
These are budget specific themes but the brokerage continues to like IT stocks like Infosys due to free cash flow generating nature of business and likely bottoming of IT spending as Interest rates have clearly peaked due to inflation cooling off in US.
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Comfortable CD ratio banks like ICICI, Federal Bank, City Union Bank, SBI, and DCB where they can grow at higher then their deposits and PEG wise or ROA/Price to Book or ROE/Price to book ratios are attractive, although the peak margins and growth in banking are behind us.
