The Modi government may manage to strike a balance between fiscal deficit, capex for growth and social spending in the Union Budget 2024, JM Financial said as it expects continuation of the existing capex agenda, higher budgetary allocation for rural economy and roadmap for 'Viksit Bharat' by 2047 to be key themes for the much-awaited event.
"Markets would be keenly awaiting any adverse changes in the capital gain tax on equities. In case there is no change in capital gain tax it would be considered positive for Indian equity market," it said.
Mahindra & Mahindra Ltd, Hero MotoCorp Ltd, ITC Ltd, Sumitomo Chemical India Ltd, Reliance Industries Ltd, Power Grid and NTPC Ltd are JM Financial's top stock picks ahead or the Budget. Sanghvi Movers Ltd, Bharat Electronics Ltd, Bharat Forge, VA Tech Wabag Ltd, Larsen & Toubro Ltd, DLF Ltd, Ambuja Cements Ltd, APL Apollo, PFC and IRCON International Ltd are some other stocks that are on JM Financial's Budget list this time.
The domestic brokearge said any tax cut, expansion in tax slab or increase in limit for tax-saving investments under Sec 80C would increase disposable income and be favourable news for FMCG firms such as Dabur India, Hindustan Unilever (HUL), Godrej Consumer and Nestle India. If excise duty or NCCD duty on cigarettes and tobacco products are raised, it would be negative for cigarette makers ITC and Godfrey Phillips, it said.
In the utility space, there are hopes for enhanced incentives for renewable energy, given the 500 GW target by 2030. This could include higher viability gap funding for areas like battery storage, offshore wind plants, and solar energy, JM Financial said. Such a development would be positive for NTPC, Tata Power Company Ltd, JSW Energy, Adani Power and CESC. Such an announcement would also benefit power ancillaries such as Suzlon Energy, Inox Wind and Sterling & Wilson. Any steps regarding rooftop solarisation will be positive for Tata Power, Borosil Renewable and Waaree Renewables. Enhanced focus on T&D capex should benefit Power Grid.
Higher allocation for defence capital expenditure is seen positive for players such as Bharat Electronics (BEL) and Hindustan Aeronautics (HAL). Higher capital spending on railways infrastructure may benefit players such as RVNL, Titagarh Rail System, IRCON and BEML. JM Financial said any increase in infrastructure capital outlay to benefit KNR Constructions, PNC Infratech, RITES and Ahluwalia Contracts.
Dedicated larger allocation to large water projects like Jal Jeevan Mission, Nal Se Jal and Inland Waterways Development could be positive for NCC, VA Tech Wabag, Finolex Industries, Ratnamani Metals and Welspun Corp.
Other than this, there are hopes of an increase in budget allocation to PMAY scheme for building additional 20 million rural houses over and above the June 10 Cabinet decision of 30 million homes for urban and rural poor over next five years. UltraTech Cement, Ambuja Cements, Dalmia Bharat may gain. A separate tax deduction limit for life insurance could benefit LIC.