Short Call | Bulls seek big picture, HUDCO rallies, BEL struggles, focus on Shree Cement, Indian Hotels

Budget 2024 throws up no big-bang offers for the market to react sharply.

The Budget is finally out of the way and it is back to business as usual. There were no big-bang announcements, but the fact that the government is indirectly trying to cool interest rates in the system by curbing its borrowings is something the market should be happy about. It was aided by the fact that the finance minister did not dole out freebies ahead of the elections as was feared by a section of investors.

The stock hit the upper circuit by the end of the trading session on back of PMAY extension and new housing scheme for middle class.

Bull argument: HUDCO is the nodal agency for PMAY and will be the biggest beneficiary among housing finance stocks. Appetite for PSU stocks also remains positive. LIC has been hiking stake.

Bear argument: The stock is expensive compared to private housing financiers. The government could keep offloading stake through OFS that can keep price under check.

The stock fell for the second straight session after announcing its December quarter earnings.

Bull argument: Defence segment continues to find favour amongst analysts,

especially BEL due to the indigenisation push. BEL continues to see a strong order inflow.

Bear argument: Revenue for the quarter was flat on delayed shipments, highlighting execution risks. While execution risks are part of the game, the disappointment can be all the greater when valuations are exepensive.

The stock gained after robust December quarter earnings.

Bull argument: Cement demand expected to remain robust due to higher government spending on housing and infrastructure. Management expects to clock a 12 percent YoY volume growth in FY24.

Bear argument: Stock looks expensive. Return ratios are lower compared to peers. East region saw subdued demand in the December quarter.

The stock hit a fresh record high on Thursday.

Bull argument: Strong quarterly earnings driven by firm room rates and healthy demand. Company’s gross margins in the December quarter was a record 37 percent. The management has delivered on its guidance made last year.

Bear argument: Capacity will slowly get added in the sector, as demand continues to remain strong. That could rein in growth in profits. Stock has run up a fair bit over the last couple of years. Gains hereon could be gradual.