Union Budget 2021 has given a new strength to the market. As a result, analysts now focus on certain stocks from commercial vehicle makers, infra and banking. Generally, the budget connects capital to infrastructure which was considered to be a missing link. Here we discuss about few of the Stocks that benefits from 2021 Budget. It’s Always better to consider the financial ratios like EPS , OBV etc.
Here are some of the stocks from analyst’s suggestion:
Road & Infra :
Analysts think that stocks like IRB Infrastructure, Ashoka Buildcon and Dilip Buildcon may obtain a boost. This is due to the government’s capital expenditure of ₹ 1.08 lakh crore for road ministry. Most of the Analysts and the brokers says stocks from Road & infra sector can mostly be benefited from 2021 budget.
VP Nandakumar, MD & CEO of Manappuram Finance accepted the government’s proposal to shorten the permitted loan amount for recovery under the SARFAESI Act for NBFCs. He said that it will play an important role in strengthening the NBFC sector. Bajaj Finance and other top NBFCs are some of the suggested ones.
Karthik Srinivasan, Group Head of Financial Sector, ICRA said that budgeted recapitalization of PSBs is perfectly in line with the estimates for near-term growth, presuming banks can reissue bulk of ATIs that contain call option due over next 12 months. The proposal of divesting two PSBs anticipated to extent the participation of private sector. Analysts suggest Axis Bank, IndusInd Bank, Kotak Mahindra Bank, ICICI Bank, HDFC Bank, SBI and other PSUs.
Real Estate :
Analysts said that measures like extension for additional deduction of interest up to ₹ 1.5 lakh loan on affordable housing and one-year tax holiday for affordable housing projects will profit the stakeholders. It also will increase investments. Some of the top picks are Oberoi Realty, Prestige Estates Projects and Indiabulls Real Estate.
The government applied agriculture infrastructure cess of 100% on alcoholic beverages, while reducing basic customs duty to 50% from 150%. Stocks like Radico Khaitan and United Spirits are the top picks.
Analysts anticipate that the lack of mentioning of rise in cement prices in the minister’s speech can be a sign to the wellness of this sector. The government had 34.5% higher capital expenditure in 2021-22. Shree Cement, ACC, UltraTech Cement and Ambuja Cements are likely to benefit from it.
There has been a reduction in import duty on gold and certain other precious metals from 12.5% to 10%. As a result, in the domestic market, jewelry would be cheaper for buyers. Therefore, the declaration of Sebi as regulator for gold exchanges in India can be a hint at regulation of digital transactions. Analysts suggest following makers like Titan.
In order to attract the enhanced flow of capital, the government proposed to increase FDI in insurance to 74%. The top picks in this sector are ICICI Pru Life, HDFC Life, SBI Life and ICICI Lombard General Insurance.
These are some of the stocks to track after the Budget 2021.