Benchmark indices BSE Sensex and NSE Nifty plunged nearly 10 per cent since the beginning of the ongoing financial year till February 18. Global factors such as the slowdown in the Chinese economy, currency devaluations and fall in crude oil prices have dampened market sentiments in 2016.
According to market experts, a key trigger for the markets would be if the government presents a budget focused on growth and increasing investment spending, while staying firm on the fiscal consolidation path.
Sahil Kapoor, chief market strategist, Edelweiss Broking said, “Union Budget 2016-17 could positively impact low cost housing, bank – announcement of banking recapitalisation, startup companies – clarity on incentives to startups and manufacturing sector on incentives and ease of doing business under Make in India.”
According to Angel Broking, in the backdrop of the Union Budget 2016, the brokerage house believes select moves focused on infrastructure and housing would be key beneficiaries going ahead.
We list out 10 stocks recommended by brokerages that may benefit with budget moves:
Ashok Leyland and Maruti Suzuki: Karvy Stock broking says, “Uniform excise duty on passenger cars if announced in the budget and implementation of GST would benefit auto and auto ancillary sector.”
Angel Broking is positive on Ashok Leyland, given the cyclical upturn in MHCVs and additional growth avenues. The brokerage believes the share price of Ashok Leyland can touch Rs 111.
All Cargo, Concor, Transport Corporation of India: According to Karvy Stock Broking any clarity or announcement on GST implementation will have a positive impact on the logistics sector.
National Buildings Construction Corporation (NBCC): NBCC reported order book of over Rs 35,000 crore at 3QFY2016-end. Considering the bid pipeline for re-development works from Delhi and other state governments, and with ‘Smart City’ projects to take-off shortly, Angel Broking is bullish on NBCC shares and expects the company’s order-book to grow 3.5 times during FY2015-18E to Rs 59,440 cr.
Torrent Power: According to SMC Investments and Advisory, Torrent Power is expected to gain from four of its gas-based power plants, which will get government subsidy on use of Re-gasified Liquefied Natural Gas (RLNG) for six months from October to March. Moreover, government initiatives such as ‘Make in India’ and ‘Power for All’ would give further accelerate to the financial growth of the company. Thus, it is expected that the stock will see a price target of Rs 266 in 8 to 10 months time.
Essel Propack: The company is the world’s largest manufacturer with units operating across countries such as USA, Mexico, Colombia, Poland, Germany, Egypt, Russia, China, Philippines and India. The company is holding Oral Care market share of 33 per cent in volume terms globally. According to SMC, capacity and capability in the international regions will drive the future growth. While most of the capacities are built up, the leverage on these capacities will aid in improving in margins. Thus, it is expected that the stock will see a price target of Rs 177 in 8 to 10 months time.
KSB Pumps: ICICIdirect.com is positive on KSB Pumps due to its superior technology products and wide product basket including solar water pumps. The company would be one of the key beneficiaries of increasing spend on irrigation by the central government and also tends to gain immensely from a revival in the domestic capex cycle.
Kajaria Ceramics: The home building products company will benefit if government imposes anti-dumping duty on ceramic tiles from China in this Budget, says brokerage house Karvy.