Budget 2022 has continued the growth momentum led by increased capital expenditure while maintaining financial prudence. Finance Minister Nirmala Sitharaman, during her speech, said, the 35 percent increase in capital expenditure will drive infrastructure and jobs.
This year's Budget has mainly focussed on infrastructure development, digital and emerging technologies to propel equitable growth. More emphasis was laid on developing rural India by way of education, digital transformation, basic amenities like water, housing, sanitation, etc. Further, the increased capital expenditure (capex) will revive growth coupled with improving capacity utilization across sectors like steel, aluminium, refining, textiles, real estate should result in a multi-year cycle for the capital goods sector.
"We believe that it is a growth-oriented and bold budget given a not so conducive environment with rising crude prices, global inflation, geopolitical uncertainty, supply chain disruptions and hawkish stance of the federal reserve. We believe such an environment can increase inflation and pressurize currency even as the government is targeting growth by playing on the front foot. We believe 2022 will be a stock pickers market and easy money-making is over," stated brokerage firm Prabhudas Lilladher in its Budget review report.
Now that the budget is over, are you confused about what to buy?
Let's take a look at top stock picks by various brokerages post Budget:
Prabhudas Lilladher
The brokerage's top largecap picks include RIL, TCS, HDFC Bank, Infosys, ICICI Bank, HDFC, Bajaj Finance, L&T, Avenue Supermarts, Sun Pharma, Tata Motors, and Hindalco with a potential upside between 12-30 percent each.
Meanwhile, Ashok Leyland, Crompton Graves, Endurance Tech, Affle India and IPCA Labs are its top midcap picks and Fine Organic Ind, VIP Ind, Westlife Dev, Nazara Tech and Inox Leisure are its top smallcap picks.
Among midcaps, it sees the highest upside of 39 percent for Ashok Leyland while this figure is 44 percent for Nazara Tech among its smallcap picks.
Antique Research
Antique's top largecap picks post Budget include Infosys, ICICI Bank, HUL, SBI, HDFC, HCL Tech, L&T, Axis Bank, Ultratech, Adani Ports, Hindalco, DLF, Siemens, Dr Reddy's, Cholamandalam Finance, and HPCL. It sees the highest return potential for HPCL at 65 percent followed by HCL Tech at 35 percent. Infosys and Adani Ports have an upside potential of 33 percent each.
Its top midcap and smallcap picks include Laurus Labs, Crompton, Linde India, APL Apollo Tubes, Sumitomo Chemicals, Blue Dart, Brigade Enterprises, Century Textiles, KNR Construction, CanFin Homes, JK Lakshmi Cement, TCI, Mazagon Dock, Somany Ceramics, Kirloskar Pneumatic, IOL Chemicals, and Apollo Pipes. The Highest upside potential is seen for IOL Chemicals at 58 percent followed by Mazagon at 53, Apollo Pipes at 43, and Somany at 37.
Motilal Oswal
The brokerage prefers BFSI, IT, Consumer, Telecom, Metals and Cement while is Underweight on Auto and Energy in its model portfolio.
Top ideas ̶ Large-caps: ICICI Bank, SBI, L&T, Axis Bank, Reliance, Bharti Airtel, Infosys, HUL, Titan, and Hindalco.
Mid-caps: Ashok Leyland, Oberoi Realty, Indian Hotels, Devyani International, Zensar Tech, Indigo Paints, ABFRL, Gujarat Gas Orient Electric, and VRL Logistics.
Jefferies
As per the brokerage, capital goods, cement, pipe companies are beneficiaries of the budget announcements.
Infra stocks will benefit from a 35 percent YoY rise in Capex which is positive for L&T. It added that data Centres getting infrastructure status points to prospects of a tax holiday – positive for Siemens, ABB. Defense spending is up 10 percent YoY which is positive for Bharat Electronics and L&T.
ITC will also be positively impacted as taxes on cigarettes remain unchanged. Customs duty on cut and polished diamonds and gemstones is positive for Titan. Pipes firms like Astral Poly, Supreme Ind and Finolex Industries will benefit from the announcement of the 33 percent rise in piped drinking water.