Construction and infrastructure-related stocks continue to be heavily traded as the Street is betting on some key capex announcements in the upcoming Budget.
At the very least, experts expect the government to stick its capex estimate of Rs 11.1 lakh crore outlined in the Interim Budget. "An unwavering focus on roads, power, urban development, and railways will create key long-term economic multipliers," said Axis Securities.
The brokerage expects a healthy increase in capital outlay for infrastructure in the Union Budget 2024-25 to meet the goals of the National Infrastructure Pipeline and Gati Shakti Master Plan.
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Key infrastructure segments like roads, railways, airports, and urban infrastructure are anticipated to receive major focus. The government is expected to raise spending on highways, roads, bridges, and urban development, with additional funds allocated to projects such as Bharatmala and Sagarmala.
With a focus on expanding the road network, a 10-15 percent year-on-year increase in allocation for the Ministry of Road Transport & Highways is expected.
There will likely be dedicated funds for larger projects like Jal Jeevan Mission, High-Speed Rail, Smart Cities, and Inland Waterways Development, supporting the broader objectives of the National Infrastructure Pipeline (NIP).
Tata Projects has urged the government to encourage private capital expenditure and adopt a holistic view to aid growth in the construction sector. "Private sector capital expenditure will play a significant role in growth, and the government should boost it," Tata Project's Managing Director and CEO Vinayak Pai told Moneycontrol.
In the Interim Budget, Finance Minister Nirmala Sitharaman raised the infrastructure capex by 11.1 percent. With a heightened focus on developing highways, railways, and urban infrastructure, companies in these segments are poised for significant opportunities, said Axis Securities.
Stocks like KNR Constructions, PNC Infratech, RITES, KEC International, J Kumar Infraprojects, and Ahluwalia Contracts are among the stocks that Axis Securities expects to be in focus because of the continued thrust on infrastructure.
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Under the National Infrastructure Plan (NIP), the government aims to enhance the country’s infrastructure. Major highway projects are expected to boost demand for cement, benefiting companies like UltraTech Cement, Ambuja Cements, Dalmia Bharat, JK Cement, JK Lakshmi, and Birla Corp, the Axis report said.
The budget may also emphasise on digital infrastructure, potentially offering incentives for data centers and smart cities, benefiting companies like Anant Raj. A renewed focus on affordable housing schemes in rural markets could positively impact urban developers like MICL and TARC, the report says.
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