The good part about the Budget is that it will accelerate fiscal consolidation, and create jobs and there is a sense of consistency in policy, according to Prashant Jain, CIO of 3P Investment Managers.
Despite some grumblings about the hike in long-term capital gains (LTCG) tax and short-term capital gains (STCG) tax, Jain said the Budget was overall positive.
However, Jain is cautious in his outlook, barring some pockets of the market.
He is bearish on stocks in the manufacturing, industrial, and defence sectors, irrespective of whether they are public sector or private. Jain's caution stems from the sharp surge in these stocks over the last year.
While markets are pricing extremely high growth for these sectors, Jain believes the risk-reward ratio for stocks in this space is unfavourable at this time.
However, he stated that banks, both public and private, are still good bets.
Talking about the revival in the consumption space, Jain said that the government, with its measures to boost economic growth, lower tax rates, and create jobs, is working in this direction.
However, regarding consumption stocks, Jain believes that consumer staples have outperformed for a long time and are still a little expensive. Meanwhile, the consumer discretionary space looks better, even though the stocks in this space are not exactly cheap either.
On whether power stocks are attractive in light of the Budget measures to support renewable energy and develop nuclear energy, Jain stated that any impact of Budget announcements on the stocks will be seen after several years. He told Moneycontrol that power stocks are nearly reaching fair value after a decent run recently.
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