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Union Budget 2024: Impact on different sectors

2 Mins 25 Jan 2024 0 COMMENT


Measures taken for FY23-24E


Key Stocks

Agriculture credit has increased by ~11% YoY Rs 20 lakh crore. This is likely to boost agriculture demand and further requirement for agriculture credit.


Positive for PSU banks as it will boost agriculture demand and further requirement for agriculture credit



SBI, Bank of Baroda, Indian Bank


Revamped credit guarantee scheme for MSMEs with effect from April 1, 2023 with infusion of Rs 9,000 crore into the corpus. This will enable additional collateral free credit guarantee of Rs 2 lakh crore



This is likely to aid MSME's growth and, thus, demand for credit from banks



Kotak Mahindra Bank, Axis Bank, IndusInd Bank



The banking sector had a positive reaction due to the strong inclination of the government to boost consumer spending, which will assist in driving credit growth.

Capital Goods/Infra

Measures taken for FY23-24E


Key Stocks

Government capex in road segment for FY24E is pegged ~25% higher at Rs 2.6 lakh crore. Furthermore, segments like Housing (PM Awaas Yojana), Water (Jal Jeevan mission) has seen a growth in outlay to the tune of ~66% YoY, 17% YoY



Positive for EPC players engaged in said segments as ordering activity will witness a boost




L&T, KNR Construction, Thermax, PNC Infra, NCC, PSP Projects




Capital investment outlay increased 33% YoY to Rs 10 lakh crore and focus on Green Energy based focus (Green hydrogen/approval high value renewable projects)



Massive increase in allocation towards capex will increase order inflows across sectors such as power T&D, water, railways, road. On a broad basis, companies in the EPC and products segments are expected to benefit




L&T, Siemens, KEC, SKF India, Techno electric, Action Construction



Within capex segments, railways has garnered lion's share at Rs 2.4 lakh crore. Within railways,

segments such as laying new line (allocation increased by 29% YoY), rolling stock (148% YoY), railway electrification projects have seen robust allocation



The increased allocation in the sub segment of railways will augur well for railway EPC companies, wagon manufacturers, bearing companies, etc





L&T, Siemens, KEC, SKF India, Timken India




Strong focus on Green Capex to augment the value of Green Hydrogen coupled with incremental addition of renewable capacity. The Budget also announced investment support of Rs 8,300 crore to the Ladakh Renewable project (total value pegged at Rs 20,600 crore)



The PLI of Rs 20,000 crore announced before Budget and investments to be made in renewable capacity for viability of green hydrogen ecosystem will involve strong capex in the manufacturing of electrolysers and putting up new generation and transmission infra for renewable power







L&T, Siemens, KEC, Thermax, Anup Engineering




Measures taken for FY23-24E


Key Stocks



Capital investment outlay increased by 33% YoY to Rs 10 lakh crore



As steel and cement are core sectors, reiterating the focus on infrastructure development would aid in increasing domestic demand




Tata Steel, JSW Steel, SAIL, UltraTech, ACC, Ambuja, Shree Cement


Source: Budget Documents, ICICI Direct Research

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