Moneycontrol's Budget Sensitivity Index (MC BudEx) closed 1.4 percent higher on January 31, a day ahead of the big financial event. In comparison, the Nifty and the Sensex closed flat, up 0.07 percent each.
Top gainers on the MC BudEx were Chambal Fertiliser, Bharat Electronics, IRB Infra and Bank of Baroda, all gaining 6-8 percent.
Also Read: Budget 2023: Budex, the MC Budget Sensitive Index, is here to map the market pulse
Chambal Fertiliser closed 8.5 percent higher at Rs 314 apiece. Industry experts believe that the Budget is likely to include changes aimed at making domestic phosphatic fertiliser manufacturers more competitive, such as reducing import duties on raw materials like phosphoric acid and ammonia.
Additionally, there may be a reduction in import duty on liquefied natural gas (LNG) for the urea industry.
However, fertiliser subsidy might be cut from Rs 2.50 lakh crore during the current fiscal year to Rs 1.40-1.50 lakh crore during FY24.
Defence is another sector that will be closely watched as Finance Minister Nirmala Sitharaman lays out the fineprint. Stocks like Bharat Electronics, Bharat Dynamics and Hindustan Aeronautics closed 4-6 percent higher on January 31.
Also Read: Budget 2023: Govt expected to up the ante on domestic defence manufacturing
Under its ambitious Atmanirbhar Bharat scheme, the government has banned imports of several items, including crucial parts used in defence equipment. This means they are being manufactured in India now, which has improved the fortunes of these companies.
Experts believe that the sector will see increased allocation with focus on combat aircraft, combat drones and missiles.
IRB Infra, a company engaged in constructing roadways and highways, closed 6.7 percent higher on January 31. The budgetary allocation for the Ministry of Road Transport and Highways (MoRTH) is expected to be around Rs 2.5 lakh crore in 2023-2024, about 25 percent higher than the current fiscal, multiple officials have told Moneycontrol.
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