Budget 2020 essentially focused on boosting agriculture, rural and healthcare sector. The government also showed its intent to develop smart cities across the country.
In her budget speech announced on February 1, FM said the government has proposed to develop five new smart cities.
"There is a case for maximising the benefits of three separately developing economic activities: (1) the upcoming economic corridors; (2) revitalisation of manufacturing activities; and (3) Technology and the demands of aspirational classes. We have to benefit from their convergence. Hence, it is proposed to develop five new smart cities in collaboration with States in public-private-partnership (PPP) mode. Such sites would be chosen that offer the best choices in terms of aforementioned principles," she detailed.
Considering the government's focus on infrastructure, including smart city projects, brokerages highlighted 20 stocks which will get the benefit from this:
Positive for L&T, Ashoka Buildcon
Centrum Broking said government budgetary support (GBS) increased 40 percent to Rs 13,700 crore from FY20RE of Rs 9,840 crore. But FY20RE itself fell short of FY20 BE of Rs 13,700 crore (so no change from FY20 BE levels).
Note: BE is Budget Estimates and RE is Revised Estimates.
Positive: RITES, Siemens, APL Apollo Tubes
SMC Global said Atal Mission for Rejuvenation and Urban Transformation (AMRUT) scheme has seen allocation going up by 40 percent and allocation for metro projects has been kept at Rs 17,842 crore.
Overall increased allocation should help urban infra companies with Metro and Urban Transport related companies gaining higher share, the brokerage added.
Positive for Havells, Crompton
Antique Stock Broking said key centrally sponsored schemes which have seen a material increase in budgetary allocation are: a) Pradhan Mantri Awas Yojna (Urban and Rural) where budgetary allocation has been increased to Rs 27,500 crore from Rs 25,300 crore, b) Deen Dayal Upadhay Gram Jyoti Yojna for rural electrification at Rs 4,500 crore (up 11% YoY), c) Amrut including smart cities (up 40 percent YoY).
Focus on rural electrification and housing to help electrical consumer durables companies like Havells and Crompton, it added.
Positive for PSP Projects, NCC, L&T
Edelweiss said the government proposed to set up Viability Gap funding window for setting up hospitals in the PPP mode, and proposed to develop five new smart cities in collaboration with States in PPP mode.
Positive for companies like Schneider Electric Infrastructure, Siemens, KEC International, APL Apollo Tubes, Sterlite Technologies, Asian Paints, Kalpataru Power Transmission
Axis Securities said the government's aims to set up five new smart cities will be positive for abovementioned stocks.
Positive for L&T, KEC International, Bharat Electronics
ICICI Securities said the capital outlay to Urban Rejuvenation Mission including AMRUT and Smart Cities Mission will be beneficial to abovementioned stocks.
Buy PNC Infratech, HG Infra, KNR Constructions, Ashoka Buildcon
BOB Capital Markets said key urban development schemes saw higher funding: AMRUT, Smart Cities, PMAY and Metro-MRTS projects. Affordable housing also received a boost with a one-year extension of loan interest incentives up to 31 Mar 2021 for purchase.
Budgetary spending on infrastructure has declined, but the recent NIP announcement suggests the government's thrust on the sector remains intact, it added. It prefers asset-light companies and select asset owners with sound financials.
Positive for ABB, Siemens, Ashoka Buildcon
Prabhudas Lilladher said the Urban Rejuvenation Mission, which included AMRUT and Smart Cities Mission, will be beneficial for abovementioned stocks.Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.