stock picks: Brokerage Picks: Stocks likely to gain big from Budget measures

The Union budget has maintained infrastructure spending and increased focus on agricultural research and horticulture. The consumption sector is also expected to benefit from certain incentives announced, while housing finance and cement stocks are likely to be among key beneficiaries. Here are 15 stocks, five each from the large-cap, mid-cap, and small-cap segments from leading brokerages that could be key beneficiaries of the budget measures.

JM FINANCIAL SERVICES RESEARCH

BHEL
CMP: Rs 311 | Target: Rs 360

Focus on nuclear plants as well as new advanced ultra-supercritical thermal power plants of higher efficiency with 800 MW capacity should benefit BHEL in a meaningful way.

PNB Housing
CMP: Rs 781 | Target: Rs 970

Focus on affordable housing as budget announced following incentives PM Awas outlay and allocation of Rs 2.2 trillion under Pradhan Mantri Awas Yojana in the current year is a massive increase. This should help HFCs significantly with PNB Housing being the top pick.

Syrma SGS Technology
CMP: Rs 470 | Target: Rs 525

Focus on manufacturing and an increase in basic customs duty on printed circuit board assembly of specified telecom equipment should benefit Syrma significantly.

MOTILAL OSWAL FINANCIAL SERVICES

Larsen & Toubro
CMP: Rs 3623 | Target: Rs 4,150

The government has maintained the capex target of `11.1 trillion and we expect L&T to remain a key beneficiary of government spending, particularly in areas like water, urban transportation, bridges, B&F and renewables.

Godrej Properties

CMP: Rs 3,111 | Target: Rs 3,600

The much-talked-about indexation norm in the budget will not have any impact on primary housing demand in India. Godrej will continue to deliver 20%-plus growth in the near term.

Senco Gold

CMP: Rs 946 | Target: Rs 1,350

The govt has reduced customs duty on imports of gold and silver. Senco Gold as is one of the most promising players in organised retail jewellery and has a pan-India presence.

IIFL SECURITIES

Kaynes Technology

CMP: Rs 4,142 | Target Rs 4,740

We believe Kaynes is likely to benefit as one of its flagship products, the TCAS, and the interlocking system will help in accelerating into the railway sector.

Quess Corp CMP: Rs 710 | Target: Rs 744

Several schemes for upskilling and training employees and students are positive for staffing companies, like Quess Corp, as the government will spend Rs 2 trillion over 5 years to facilitate employment, skilling, and other opportunities for 41m youths.

Aditya Vision

CMP: Rs 4,890 | Target: Rs 5,452

Several announcements for Bihar are likely to benefit Aditya Vision, which is the dominant electronics retailer with over 50% market share. It is also the largest retailer in the state of Jharkhand and has forayed into eastern Uttar Pradesh.

KOTAK SECURITIES

Adani Ports

CMP: Rs 1,487 | Target: Rs 1,650

The outperformance of the stock can continue, with a boost to margins as the company is sitting on a capacity bank 5-6X of its existing capacity. The group’s financial situation is also improving for its listed entities.

Life Insurance Corp

CMP: Rs 1,161 | Target: Rs 1,300

LIC is well positioned to ride the growth in a highly underinsured market, both in terms of penetration and density. LIC has been diversifying into higher-margin non-par products improving its Value of New Business margins.

Zomato

CMP: Rs 219 | Target: Rs 225

Growth momentum in the food delivery business will remain reasonably healthy. The Blinkit business continues to scale, well driven by new store additions and improving customer engagement.

SHAREKHAN

Hindustan Unilever

CMP: Rs 2,709 | Target: Rs 3,260

Better monsoons and higher allocation to rural development schemes will help in a steady recovery in consumption growth in rural India. HUL will be one of the key beneficiaries.

Canfin Homes

CMP: Rs 831 | Target: Rs 1,050

An additional 3 crore houses under PM Awas Yojana is potentially positive for housing finance companies as it will improve mortgage credit penetration. HFCs like Canfin Homes are likely to be big beneficiaries.

Dee Development Engineers

CMP: Rs 367 | Target: Rs 450

The company is leveraging its industry-leading position and enhancing manufacturing capacities to capitalise on a capex revival which was one of the key focus areas in the Budget.

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