It was a bloodbath on Dalal Street the day the Finance Minister presented her Budget, BSE Sensex tumbled 1,000 points her Bahi-khata failed to impress. However, brokerage firm Sharekhan says it's not all bad and you can still invest in stocks that will move up aided by some Budget announcements.
It was a bloodbath on Dalal Street the day the Finance Minister presented her Budget, BSE Sensex tumbled 1,000 points her Bahi-khata failed to impress. However, brokerage firm Sharekhan says it’s not all bad and you can still invest in stocks that will move up aided by some Budget announcements. In its post-Budget analysis of the share market for Financial Express Online, Sharekhan has come up with a list of stocks that you should buy or sell to make the most this year’s Union Budget. Let us spill the beans and tell you the four Public Sector Undertakings (PSU) stocks that you should buy.
Bharat Electronics Limited
Sharekhan has a ‘Buy’ recommendation for Bharat Electronics Ltd (BEL) backed by an increase in Defence outlay by 3 per cent. BEL is the Government of India’s defence manufacturer that makes Defence-communication products, Land-Based radars, Naval systems, Avionics, among others. “Defence outlay increased by 3%. Company’s order book remains strong at Rs 54,959 crore. Also, the company expects to bag a significant Coastal Surveillance System order in Q4FY2020,” Sharekhan said. The target price for BEL has been kept at Rs 130 in a 12-month period.
Bharat Petroleum Corporation Limited
The public sector company has been listed for sale by the government and that puts a ‘Buy’ recommendation on the stock. The government of India has pinned its disinvestment target at Rs 2.1 lakh crore, up from its previous year target of Rs 1.05 lakh crore which it failed to meet. BPCL is a big name on that list with a profitable business. Currently trading at a price of Rs 491, BPCL could be a huge moneymaker for the government if it finds the right buyer. “The government’s disinvestment target for FY2021E includes strategic divestment of BPCL. Positive as the privatisation of BPCL could re-rate the stock,” said Sharekhan’s analysis. The target price for BPCL in the next 12-months is Rs 565.
Sharekhan has a positive outlook for the Gujarat based gas distribution company. The company has India’s largest customer base in Residential, Commercial and Industrial segments. With 23,200 km of gas pipeline network and around 344 CNG stations, Sharekhan sees the company’s volume growth to increase. Target price in the next 12-months has been pegged at Rs 305. Currently, Gujarat Gas is trading at Rs 284.70.
The public sector lender has gained from some disputes being settled at NCLT, the biggest being the Essar steel settlement. SBI received Rs 13,000 crore from ArcelorMittal after the company’s takeover of Essar Steel was given a nod. SBI posted a 41.17 per cent rise in profit year-on-year in the Q3 earnings report. “The Budget’s impact is Neutral. No recapitalisation plan announced, but SBI is adequately capitalized. Also, SBI will have little difficulty in accessing the market for capital, if required,” said Sharekhan with ‘Buy’ recommendation for the stock and a target price of Rs 415 in a 12-month period.