The NDA 3.0 government’s maiden budget has set the stage for investors, offering clarity on future fiscal policies. Post-budget, MC Pro’s independent research team has curated a portfolio of 17 stocks expected to capitalize on the budget’s direction, emphasizing fiscal consolidation and capex.
Despite initial concerns about coalition demands and tweaks in capital gains tax, the budget’s focus on job creation, economic self-sufficiency, and consumption growth remains strong. This diverse portfolio is designed to outperform benchmarks, featuring stocks that are fundamentally sound and reasonably valued.
Key Picks from the Pro Budget 2024 Portfolio
- Data Patterns: A major player in defense electronics, Data Patterns is well-positioned to benefit from the emphasis on import substitution. With a robust order book and strong product focus, the company is set for future growth.
- Deccan Cements: Nearing the completion of its capex phase, Deccan Cements is poised for earnings acceleration, especially with the budget’s infrastructure support for Andhra Pradesh.
- Intellect Design: Following the path of large IT product companies, Intellect Design is set to see top-line growth and higher earnings due to its matured product lineup and reduced R&D expenses.
- L&T: With ongoing government infrastructure spending and private capex revival, L&T is expected to see continued growth, supported by improved performance from its subsidiaries.
- Medi Assist: As a leading third-party administrator for insurance companies, Medi Assist offers unique exposure to the growing health insurance sector.
- Metro Brands: With aggressive network expansion and the acquisition of FILA, Metro Brands is set to tap into the high-growth sports and athleisure footwear market.
- Navin Fluorine: This chemical sector player is overcoming inventory and demand challenges, with strong potential in the CDMO space and steady domestic pricing for R-32 gas.
- PI Industries: Dominant in the CSM exports business, PI Industries is expected to perform well domestically with a normal monsoon forecast and new product launches. Its new pharma business adds to its growth prospects.
- Protean eGov Technologies: A pioneer in e-governance solutions, Protean benefits from rising digital adoption in India and the government’s focus on digital public infrastructure.
- Royal Orchid Hotels: Set to benefit from the ongoing hotel industry upcycle, Royal Orchid Hotels is positioned for accelerated earnings growth through hotel additions on revenue share or leased basis.
- Safari: In the organized luggage market, Safari is experiencing structural demand growth as travel becomes a key household budget item, leading to a shorter replacement cycle.
- Shaily Engineering: Specializing in high-precision injection-moulded products, Shaily Engineering anticipates significant growth in the high-margin healthcare business following large capex investments.
- Sky Gold: With plans to triple its manufacturing capacity, Sky Gold is ready to enter the big league, bolstered by rising scale and reduced financing costs.
- Sona BLW: With a leadership position in EV technology, Sona BLW is set to benefit from the growing EV market in India and abroad, supported by strong financial performance.
- SBI: With an ROA of around 1% and the lowest credit-to-deposit ratio, SBI stands to gain from rising capex and credit demand. A favorable asset quality and low valuation add to its appeal.
- Syngene: A leading CRAMS player, Syngene is seeing increased business inquiries as the US biotech funding crisis eases. It is poised to benefit from the US Biosecure Act, which favors non-Chinese CRAMS partners.
- Va Tech Wabag: A major beneficiary of the budget’s focus on urban development, Va Tech Wabag’s robust order book in water treatment and solid waste management projects makes it a strong pick, even at current valuations.
