India’s stock benchmark Sensex fell amid the recent global sell-off.
Infrastructure, rural development and healthcare stocks are among analysts’ top picks as the Indian government ramps up spending in its budget to boost investment to drive growth. chief.
Construction spending, including roads and ports, as well as incentives for electric mobility and renewables will likely be the focus of Finance Minister Nirmala Sitharaman’s budget speech on Tuesday. , as policymakers seek to get the economy out of a predicament. by the pandemic.
With India’s equity benchmark falling amid the recent global sell-off fueled by concerns about an impending Federal Reserve rate hike and foreign funds fleeing the market, Investors are hoping the budget announcements will bring some relief.
That said, the S&P benchmark BSE Sensex has risen in the month after the budget date in just three of the past eight years since Prime Minister Narendra Modi came to power in 2014. It has fallen or traded margins for the year. Other times.
“The overall focus of the budget is likely to be on job creation and investment-driven growth, which implies incentivizing infrastructure development,” said Neeraj Chadawar, head of quantitative equity research at Axis Securities Ltd., wrote in a note. “This will include public infrastructure investment for roads, waterways, subways, railways, defence, digital infrastructure and green technology.”
Here are the top picks of sectors and stocks by some of the top brokers:
The infrastructure
The index measures India’s top 30 companies in road, air, port, shipping, rail and other utilities, up 36% in 2021, the best gain since 2009 , as the government continues to increase public spending to create jobs and promote development. ICICI Direct expects allocations to continue “stable” with higher spending on roads, defence, waterways, housing and rail.
Top picks include Polycab India, HG Infra Engineering, KNR Constructions, PNC Infratech, Larsen & Toubro, Thermax, KEI Industries, ABB India, Siemens India, Ramco Cements, UltraTech Cement, ACC, Ambuja, Bharat Dynamics, Bharat Electronics , NTPC, Container Corporation of India.
Renewable Energy / EV
Along with the government’s focus on reducing emissions and dependence on fossil fuels, analysts expect more support for infrastructure development for electric vehicles and green energy production. .
“The impetus is expected in sustainable technologies with certain benefits to drive electric vehicle adoption in India. Furthermore, the EV charging infrastructure segment is expected to receive a boost to support further EV adoption,” according to Axis Securities’ Chadawar.
Top picks include Maruti Suzuki India, Tata Power, Adani Green, Hero Motocorp, Bajaj Auto, TVS Motors, Mahindra & Mahindra, Tata Motors, Minda Corporation, Gabriel India, Dixon Technologies.
Rural / Agriculture
Sell-side analysts expect continued support to agriculture and rural areas through more aid to food processing, manufacturing-related incentives, and higher agricultural credit. , and subsidized fertilizers and crop protection. Increased agricultural spending will benefit consumer goods companies struggling with higher input costs.
“Given the backdrop of rising Covid cases, we think policymakers will need to strike a balance between boosting rural demand and investing in infrastructure while continuing on a path of consolidation,” he said. fiscal policy to maintain macro stability,” Goldman Sachs (India) Securities Pvt. analysts led by Santanu Sengupta wrote in a note.
Top picks include PI Industries, Dhanuka Agritech, Rallis, Godrej Agrovet, Hindustan Unilever, Britannia, Dabur and Nestle India
Healthcare / Pharmaceuticals
Continuing to focus on strengthening healthcare infrastructure, the government is expected to increase spending on companies to boost production, as well as reduce taxes for individuals purchasing health insurance. , access to better health care and strongly promote drug research.
Top picks include Apollo Hospital, Narayana Healthcare, Shalby Ltd., Gland Pharma, Krishna Institute of Medical Sciences, Healthcare Global Enterprise, Max Health, HDFC Life, SBI Life and most drug manufacturers.
NOTE: Brokers surveyed for top pick in the sector include: Axis Securities, Religare Broking Ltd., ICICI Securities Ltd. and BofA Securities.
