Agriculture Facing higher food inflation, the agriculture industry could see substantial support. Nuvama Institutional Equities suggests the government may allocate Rs 2 lakh crore to agriculture, focusing on expanding income support and insurance schemes. Fisdom Research anticipates higher MSP for major crops and strengthening of the PM Kisan Samman Nidhi Yojna.
Stocks to Watch:
- Escorts Kubota: Measures boosting farmers’ incomes could drive up sales for Escorts Kubota’s agricultural products.
- Kaveri Seeds: Government support for farmers will likely increase sales for Kaveri Seeds.
- Finolex Industries: Initiatives to strengthen the rural economy and boost farmer incomes will likely increase demand for PVC pipes, benefiting Finolex Industries.
- Mahindra and Mahindra: With a dominant position in the tractor segment, improved farmer incomes will boost demand for farm machinery, increasing M&M’s sales.
Rural Consumption Investments in digital infrastructure, skill upgradation, job creation, and MSME development are expected to boost rural consumption. Kotak Securities anticipates increased allocations towards PM-KISAN, rural roads under PMGSY, rural employment under MGNREGS, and higher LPG subsidies for women.
Stocks to Watch:
- Dabur India: As a leading consumer staples brand with a strong rural focus, Dabur India will benefit from measures boosting the rural economy.
- Hindustan Unilever: With a focus on premiumization, Hindustan Unilever will perform better if the Budget announces measures for the rural economy.
- Shakti Pumps: Leading in energy-efficient submersible pumps, Shakti Pumps will benefit from the PM-KUSUM scheme and any additional rural support.
- TVS Motors: With a significant chunk of its sales in the rural, entry-level segment, TVS will benefit from measures boosting rural income.
Renewable Energy The upcoming budget is expected to increase investments in renewable energy, focusing on clean technologies and expanding solar and wind power projects. Additional funds may be allocated for R&D in storage solutions and rooftop solar installations.
Stocks to Watch:
- Tata Power: Could benefit from ISTS tax waivers, increased capex announcements, and new schemes.
- NTPC: With growing power demand, NTPC could benefit from announcements on both thermal and green energy, including solar power schemes and increased capex.
- Inox Wind: Specializing in wind turbines, Inox Wind could benefit from expected announcements on wind power.
Employment The FM is expected to prioritize job creation to address economic instability and rising food prices. Measures to support domestic manufacturing, reduce personal income tax, and increase subsidies for rural housing and food are likely.
Stocks to Watch:
- Arvind Limited: Will benefit from the ELI scheme targeting labor-intensive sectors like textiles and apparel.
- KPR Mills: Could see substantial benefits from the ELI scheme and government emphasis on boosting domestic manufacturing.
Affordable Housing The budget is expected to continue funding for affordable housing and developing new satellite townships. The revamped PMAY-G scheme may increase cash support per housing unit due to rising construction costs.
Stocks to Watch:
- Aavas Financiers: Measures to develop affordable housing in semi-urban and rural areas will benefit Aavas Financiers.
- Home First Finance: The reintroduction of the CLSS will benefit housing finance companies focusing on affordable housing.
- Aptus Value Housing: Increased funding under the PMAY-G scheme could boost demand for HFCs like Aptus Value Housing.
- UltraTech Cement: Increased allocations to housing and infrastructure will benefit UltraTech.
Railways The budget is expected to significantly increase infrastructure spending, including a 25% increase in allocation for railways, focusing on safety, travel quality, and infrastructure improvement.
Stocks to Watch:
- IRCTC: Increased budget allocations for railway infrastructure and digitization initiatives will boost IRCTC’s revenue.
- Container Corporation of India: Investments in logistics infrastructure will enhance CONCOR’s operations.
- Titagarh Wagons: Government spending on railway expansion will increase demand for Titagarh’s railcars.
- Texmaco Rail: Higher expenditure on railway infrastructure will positively impact Texmaco Rail.