“We believe the government might prefer to increase spending on infrastructure which could have a multiplier effect on the economy,” Umang Papneja, CEO, Julius Baer India, told ET Markets.
Money managers and brokerages say infrastructure related stocks will be attractive opportunities ahead of the Budget.
“Investors can consider infrastructure and logistics companies as attractive opportunities ahead of the Budget. Similarly, the railway sector is also expected to attract support from the Budget, making it a good buy ahead of February 2023,” says Raghvendra Nath, Managing Director –
Axis Securities expects Budget to have a positive impact on stocks such as , , , and, .
These stocks have given returns in the range of 2.35% to 12.63% so far this year on a year-to-date basis. KEC International has offered negative 1.52% returns this year.
“With the heightened government focus on developing the overall infrastructure of the country and particularly highways, railways, urban infra companies operating in these segments have massive opportunities,” the brokerage said in a report.The government’s focus to build infra, support real estate demand and ambitious plans under the national infrastructure pipeline (NIP) will increase the demand for cement companies as well.
Some of stocks in this sector including Ambuja Cement,
, Dalmia Bharat Ltd, JK Cement, have become attractive to investors, according to Axis Securities. So far this year, cement stocks have recorded muted performance at the bourses with , and JK Lakshmi delivering negative returns on a year-to-date basis.
Bank of America said capex upcycles create material improvement in margins and valuations for companies exposed to this theme. The global investment bank has built an order inflow CAGR of 14% over FY21-25E and RoE of 16% over FY21-25E for its covered stocks like
, and L&T.
“Steel companies like
, SAIL, , and cement companies like Ambuja Cements and Cements could benefit from capex growth acceleration,” BofA said.
With data inputs from Ritesh Presswala
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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