Budget 2024: L&T to Oil India, D-Street expert suggest four stocks ahead of Modi 3.0’s first Union Budget

Budget 2024: Finance Minister Nirmala Sitharaman is set to unveil the newly-elected Modi 3.0 government's first Union Budget 2024 later this month. The upcoming budget is likely to be an extension of the interim budget presented earlier this year in February 2024. The market sentiment has turned bullish since June-end after foreign inflows resumed in Indian markets and also as investors priced in stability after Bharatiya Janata Party (BJP's) return to power.

The 30-share BSE benchmark hit its fresh lifetime high of 80,000 this week in its fastest-ever 10,000-point bull run in a record 58 market sessions. The blue-chip Nifty 50 notched another record closing high on Friday, July 5, and chalked up its fifth straight week of gains, logging its longest such streak this year.

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The NSE Nifty 50 rose 0.09 per cent on the day to end at 24,323.85 as gains in energy stocks helped it notch a record closing high for the fourth time this week. Market analysts anticipate the frontline indices to consolidate, with a generally positive outlook. In the current market scenario, D-Street experts have made few stock recommendations ahead of the Budget announcement.

In this regard, Hemal Shah, Fund Manager, Torus ORO PMS, has listed four key stocks that are likely to benefit the most from the upcoming Union Budget 2024 this month. According to Shah, the four stocks include Larsen & Toubro (L&T), HDFC Bank, Canfin Homes, and state-owned explorer Oil India.

Budget 2024: Hemal Shah lists four stocks that can benefit the most from the upcoming Union Budget-

1.L&T: The government focus on infra growth may continue in this budget too. In February, the government has raised its infra spending by 10 per cent to ₹11 lakh crore. L&T, being the market leader and present in most infra projects, should benefit going ahead. L&T has been reporting steady results.

Shah expects sustained capex ordering from the government to continue which is likely to result in good order inflows. Its subsidiaries, namely LTIMindtree, L&T Technology Services, and others, are doing well and have registered healthy growth, supplementing its base business.

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2.HDFC Bank: A boost to grow private capex would be positive for BFSI spaces. HDFC Bank, an industry leader, has been underperforming the benchmark but can lead the rally. FII turning positive may bring some cheers to the counter. Post-merger with HDFC Ltd, the bank's balance sheet is expected to strengthen. Cross-selling of products is yet another positive post-merger.

HDFC banks to build a strong granular retail portfolio as demand remains strong across segments, thereby maintaining margins between 4.0-4.2 per cent over the medium term. Overall, the Q1FY24 result was in line with the consensus and saw deposit growth higher than advances growth, indicating the focus towards building a strong balance sheet.

3.Canfin Homes: Affordable housing would be one of the main agenda in this budget, and Canfin Home is one of the finest players in the affordable housing finance segment, with pristine asset quality and superior underwriting practices. Shah expects a healthy trajectory in loan growth and stable asset quality trends to sustain while margins remain a key monitorable.

Canfin Homes has shown its ability to deliver superior return ratios metrics; superior growth; its asset quality continues to be the best in class among its peers with stage-3 assets at 0.55 per cent and NNPA ratio at 0.26 per cent; and with the strong parentage, it sees low funding cost that enables it to raise funds through diversified sources at competitive rates.

4.Oil India: The state-owned oil explorer is engaged in the exploration, development, and production of crude oil and natural gas, transportation of crude oil, and production of LPG. In collaboration with the Assam government, the company received approval to establish 620 MW capacity solar power projects in Assam.

Oil India is planning a trial run of a hydrogen fuel cell e-bus. Technical modifications are being undertaken to blend hydrogen with natural gas in the pipe natural gas network. It is evaluating opportunities to establish compressed biogas plants across multiple states and has been directed to set up 25 biogas plants. Oil India aims to produce four MMT of crude oil and 5 BCM of gas in the coming years. It operates 3.176 MMT and 3.18 BCM for crude oil and gas.
 

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, and not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.