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Union Budget 2024: Impact on different sectors

6 Mins 25 Jan 2024 0 COMMENT


Banks

Measures taken for FY23-24E

Impact

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

Impact

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

 

 

Steel/Cement

Measures taken for FY23-24E

Impact

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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