Union Budget 2022: Tata Motors, SBI Bank shares among top post-Budget money-making bets

India Budget 2022 comes at a time when the Indian economy appears to be recovering from the financial turmoil caused by the COVID-19 pandemic.

Budget Speech 2022, Union Budget 2022, Nirmala Sitharaman, Budget Nirmala Sitharaman
This year, for the Union Budget 2022, Finance Minister Nirmala Sitharaman has once again chosen a handloom weave. (Photo: PTI)

By Prashanth Tapse

Post FOMC meeting our focus will shift to the biggest and the most awaited event of the year i.e. the Union Budget 2022-2023 which was presented on Tuesday, 1st of February 2022.

Well, India Budget 2022 comes at a time when the Indian economy appears to be recovering from the financial turmoil caused by the COVID-19 pandemic. But digging deeper, inflation is now seen raging. Actually, in a double whammy for the Indian economy: India’s retail inflation rate shot up to a five month high in December to 5.59% and growth in factory output decelerated to a nine-month low in November at 1.4%.In the U.S too, the key headline inflation hits 7%, the highest since 1982, while core CPI jumps to 5.5% —— cementing Fed’s rate hike action. The markets finally are waking up to the realization that the biggest concern for economies across the globe is inflation. In-fact, to curtain inflation, the Fed is serious about raising rates.

Sensing concerns of inflation, Foreign institutional investors (FIIs) had turned cautious in the last quarter of 2021 as they sold shares worth Rs. 35,493.59 crores in December month on top of more than Rs 39,900 crore of offloading in November and worth Rs. 25,572.19 crores for the month of October.

We will spy with one big eye —— if the Budget 2022 retains the thrust on capex-related spending to support growth. We are sure bulls must be keen to celebrate their exceptionally good fortune. Hopefully, FM Sitharaman comes out with flying colours and meets the expectations of the country which takes the Indian economy to the top three economic powers in the world over the next 10-15 years.

Our best Investment ideas after budget.

  1. TATA POWER: Cmp Rs 235/- 

Tata Power is among the largest players in high-growth areas of power distribution, power generation, solar EPC and solar rooftops and expand huge its renewable portfolio. With a renewable power capacity of 2.6 GW (GW) in 11 states, the company plans to take its renewable production to a massive 15 GW by 2025. The trigger we expect would come from the IPO of its renewable energy unit. Tata Power could also be a directly benefiting in the EV ecosystem as government may come up with provisions for EVs road map in this budget and  Tata power is the only big player offering charging solutions for home, office and public infrastructure.   

2.       TATA MOTORS: Cmp Rs 485/-

Govt to focus more on EV Ecosystem and promote the sector. We like Tata motors best in class EV focused players with 10 EVs in line-up by FY2026. Currently, Tata Motors now holds a 71 per cent market share for electric vehicles in India. The new CNG models from the brand are further anticipated to increase the total sales figure for the carmaker. Models like Tiago, Tigor, and Nexon are expected to come with factory-fitted CNG kits soon. The company is likely to roll out CNG trims of the Punch and Altroz as well, at a later stage.

3.       SBI BANK: Cmp Rs 512/-

Banks associations have made a case for lowering fixed deposit (FD) tenure to three years for availing tax benefits, in line with mutual fund products like equity-linked savings scheme (ELSS) and to make them more attractive. Along with this there are high hopes for SBI Mutual Fund initial public offering (IPO) in the first quarter of next financial year which will be the first step towards unlocking value towards shareholders by valuing the country’s largest MF between Rs 70,000-Rs 75,000 crore.

4.     DEEPAK FERTILIZER: Cmp Rs 512/-

Deepak Fertilizers and Petrochemicals Corporation Ltd is among India’s leading producers of technical ammonium nitrate, fertilizers, industrial & agricultural chemicals and crop nutrients. The New capex in Taloja (Mumbai) for ammonium plant & Gopalpur (Odisha) for ammonium nitrate will add impetus to the future growth of the company which is expected to get commissioned by March 2024e. The new capacity will not only meet the key raw material need of the company but also have excess capacity for sale in the open market and tap both the growing demand in domestic and overseas markets. With the upstream global speciality chemical intermediates value chains shifting from China to India, Deepak Fertilizers can lead the sector in next 2 years. 

(Prashanth Tapse is Vice President, Research at Mehta Equities Ltd. The views expressed are the author’s own. Please consult your financial advisor before investing.)

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