Meet the key winners and losers from Budget 2023

The Union Budget 2023 strikes the right balance between growth and fiscal prudence. It has given consumption a big boost, putting more cash in the hands of individuals and shows commitment to clean energy and manufacturing while continuing its focus on agriculture, MSMEs, urban infrastructure and tourism.

Stock gainers

Beneficiaries of capex push

Banks stands to benefit from Budget 2023-24. Capex spend has been increased steeply and is almost double of pre-pandemic level which will boost credit growth. At the same time, adherence to medium-term fiscal consolidation (5.9% fiscal deficit target for FY24) and gross and net borrowing numbers in line with Street expectations will not exert pressure on yields/interest rates. ICICI Bank and SBI will be clear beneficiaries of capex driven credit growth.

Larsen & Toubro which derives majority revenues from core engineering and construction business would benefit from in capex which was increased for third year in a row.

KEC International has strong presence in railways and will benefit from capex push.

The 33% increase in railway capex should help improve revenue visibility further of IRCON International.

Beneficiaries of consumption push
The budget has given impetus to consumption by enhancing the tax rebate to upto 7 lakhs which will put more cash in the hands of individuals. Increase in disposable income will give boost to consumption and recovery in rural markets benefiting Dabur that has the highest exposures to the rural market.

Budget 23-24 is the first budget focused on tourism development. Initially 50 destinations have been selected for tourism promotion. Govt will announce further policies. The Indian Hotels will the key beneficiary.

Beneficiaries of rural push
The budget has increased the outlay for Pradhan Mantri Awas Yojana (PMAY) to Rs 79,000 crore. This boost to low-cost housing will clearly increase the credit demand and benefit affordable housing finance players like Aavas Financiers and Home First Finance.

Government focus on rural infrastructure and housing will increase the demand for roofing sheets and other products and give fillip to Visaka’s building solutions business.  HIL (Hyderabad Industries), one of the largest manufacturer of fibre cement roofing, will also stand to gain.

Beneficiaries of manufacturing push
Customs duty exemption is being continued on import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles. This will give impetus to EVs and benefit battery manufacturers Amara Raja Batteries.

In an effort to further push electronic manufacturing in India, duty on open cells of TV panels was cut to 2.5 percent. Dixon, electronic manufacturing (EMS) provider, will benefit from the move.

To encourage production and sales of lab grown diamonds (lab grown diamonds are artificially produced but have similar properties as natural diamonds and are cost effective), Government will provide R&D grant in lab grown diamond area. Further, the budget has proposed the reduction in custom duty on key raw material viz lab grown seeds from 5% to Nil. Lab grown diamonds have huge potential in both domestic and export markets. This is positive for lab grown players like Goldiam International.

Reduced fluorspar custom rates positive for chemical companies like SRF, Navin Fluorine, Gujarat fluorochemicals as it is the basic raw material for fluorochemicals.

Reduced Epichlorohydrin custom duties positive for chemical processors such Atul industries which make Epoxy resins out of it.

Beneficiaries of green energy pushBudget annouced investment of Rs 20,700 crore incl central support of Rs 8,300 crore in the Transmission system for evacuation & grid integration of 13 GW renewable energy Project in Ladakh. Borosil Renewables is the leading manufacturer of Solar glass in India, a key component for Solar projects and stands to benefit from the project.

Stock Losers
ITC will be adversely impacted as NCCD (national calamity contingent duty) has been increased on cigarette and other tobacco products by 15% while the street was expecting hike of around 5%.

Income earned from all life insurance policies with above Rs 5 lakh premium will be taxable except for death benefits. The will adversely impact the topline growth of leading insurance players like HDFC Life, SBI Life and ICICI Prudential.

Increase in custom duty on silver bars and dores by 5 percent would increase the cost of silver jewellery impacting PC Jewellers.

Custom duty for key raw material - Styrene – increased which will hit Apcotex and Bhansali Engineering

Custom duty for key raw material - Vinyl Chloride Monomer - increased from 2 percent to 2.5 percent impacting Chemplast and Finolex.