Budget and Markets: Moneycontrol Tracker on big beneficiaries from Budget 2024 and where to invest now

Experts Moneycontrol spoke to after the Budget suggest that large-caps offer more value than mid- and small-caps.

In the recent interim budget presented by Finance Minister Nirmala Sitharaman, the Narendra Modi government conveyed a message of political confidence and firm governance in the lead-up to the Lok Sabha polls.

Contrary to some expectations, the budget avoided populist measures and instead prioritized fiscal discipline. This strategic move signals a commitment to focus on India’s future growth, steering away from short-term shortcuts.

This will ensure that India remains an attractive destination for foreign investors. But what does this mean for stock markets and where should you look for superior returns?

Moneycontrol has put together a tracker 'Budget and Markets' with the key takeaways: the big numbers, gainers and losers, themes that will sustain growth, stocks to invest in, key triggers for overall markets, and more. Here is a flavour of the round-up.

Top gainers & losers

According to the tracker, Financials are among the top gainers after the Budget as lower government borrowing is likely to keep a lid on rates. This is a positive for PSU Banks and NBFCs like Chola Finance, SBI Cards.

Housing is another gainer as the government has announced 2 crore-plus houses over the next five years under PMAY-Grameen. This will be a positive for Housing financiers such as Home First, Aavas Financiers, Can Fin Homes and HUDCO.

It is also expected to benefit Real Estate developers like Lodha, Sunteck Realty, NBCC, and Cement firms including Ultratech Cement, Ambuja Cements, Shree Cements.

The government has increased the Capex outlay by 16.8 percent. India’s capital expenditure as a percentage of GDP has grown from 1.7 percent in 2014 to over 3.4 percent which should create a strong growth multiplier, according to the Moneycontrol document.

This is likely to be positive for companies like L&T, ABB, Siemens, Cummins, Thermax and KEI.

FM in her Budget Speech also announced that railways capex has been upped by 5 percent. Additionally, 40,000 rail coaches will be upgraded and new economic railway corridors will be in progress. This is expected to be for RVNL, IRFC, Titagarh Rail Systems, and Jupiter Wagons.

• Meanwhile, the defence capex has been increased by 5.8 percent which may benefit firms like Bharat Electronics, HAL, and Bharat Dynamics.The announcement of the rooftop solar programme is expected to benefit Power companies like REC, Waree Renewable, Tata Power and IREDA, while EMS players like Dixon Tech, and Amber Enterprises may benefit from the 33 percent rise in PLI for electronics. A 44 percent rise in allocation to the tourism industry and Interest-free loans to states for developing tourism is seen as a positive trigger for Indian Hotels, Praveg, Lemon Tree, VIP Industries, IRCTC, and Interglobe Aviation. FAME subsidies' reduction by 44 percent is expected to be a positive trigger for auto companies, especially ICE bike makers like Hero Moto, Bajaj and TVS. The only loser after the Interim Budget according to the Moneycontrol document is Staples as allocation for PM-KISAN and MGNREGA remained flat which might be negative for companies like HUL, Colgate and Dabur. What Big Investors are betting on? Sandeep Tandon, Founder and CIO of Quant Group sees deep value in PSUs, but only larger names. Veteran investor Madhsudan Kela is betting on PSU Banks, but is not comfortable investing in railway stocks. According to Saurabh Mukherjea, Founder of Marcellus Investment Managers, the three big themes after Budget are private capex, energy transition and nari shakti. Prashant Jain of 3P Investments recommends investors to be extra cautious in industrial stocks as risk-reward is not attractive to him. Meanwhile, Shankar Sharma believes that India is an average large-cap market but a wonderful small-cap market. What investors need to watch out for? With the budget now behind, here's what will drive markets in the near future: Fed Commentary: The US Fed quashed the possibility of a rate cut in March. A further delay in rate cuts can sour sentiment, and delay rate cut domestically
• Valuations: Continued rise in stock prices will keep investors busy looking for value
• Red Sea Turmoil: Prolonged disruption can cause logistics and raw material costs to rise and make markets anxious
• Election Noise: Markets are pricing in the victory for BJP. In the run-up, equities will be sensitive to political noise. Negative surprises in the final outcome will cause deep cuts.
• Stock specifics: With stocks priced to perfection, stock-specific news developments will act as key triggers for markets.Where to invest? Experts Moneycontrol spoke to suggest that large-caps offer more value than mid- and small-caps. Nifty 50 P/E is on par with a 10-year average versus NSE Smallcap 100 which is trading at a premium.

Click Here for the Tracker