Interim budget watch: Anticipated influences on stocks like ITC and Reliance Industries draw attention from investors seeking insights into market movements (Budget 2024).
As Finance Minister Nirmala Sitharaman unveils the interim Budget 2024, the focus will be on whether the Nifty 50 can confidently reach the 22,000 milestone (Budget 2024).
L&T (Current Market Price: Rs 3,481) – India’s leading engineering, procurement, and construction company could see advantages if Finance Minister Nirmala Sitharaman reveals substantial capital expenditure plans for FY25. Despite a slowdown in domestic orders, L&T has been securing a growing number of international orders, particularly from the Middle East. In the December quarter, the company experienced a 44 percent YoY decrease in domestic order flow.
ITC (Current Market Price: Rs 441.75) – Any increase in excise duty or NCCD duty on cigarettes and tobacco products would harm ITC, given that a significant portion of its revenue is derived from cigarette sales. Conversely, the anticipated budget focus on investments in digital infrastructure, skill enhancement, job creation, and MSME development is expected to boost consumption spending in rural areas. This could positively impact ITC’s FMCG vertical, which is currently grappling with a demand slowdown in rural regions.
NTPC (Current Market Price: Rs 318) – As per the Central Electricity Authority, India’s peak power demand is projected to surpass 260 GW in 2025-26 and reach 277 GW by 2026-27. With the increasing need for additional capacity to meet this demand, NTPC stands to be a major beneficiary. Being India’s largest integrated power utility company, it currently fulfills 25 percent of the country’s power requirement (Budget 2024). Moreover, incentives aimed at enhancing the operational efficiency of state DISCOMS and initiatives to promote renewable energy are expected to have positive implications for the stock.
UltraTech Cement (CMP: Rs 10,145): Positive outlook due to the strong correlation between cement demand and housing/infrastructure projects. The National Infrastructure Plan’s focus on enhancing infrastructure, especially highways, is expected to boost cement demand.
Reliance Industries (CMP: Rs 2,850): Positioned for benefits from budget announcements, particularly in green energy, battery, and solar PLI schemes. Projections indicate Reliance could earn $10-15 billion from its new energy business by 2030. Having gained close to 10 percent in the past month, this stock has played a pivotal role in bolstering the index. Investors are keeping a close eye on its ability to exceed Rs 2,900 on budget day and maintain that threshold.
HDFC Bank (CMP: Rs 1,462) – Despite the absence of major banking sector announcements, HDFC Bank remains under scrutiny due to its considerable 13.52 percent weight on the index as of December-end (Budget 2024). The stock will be under scrutiny as Finance Minister Nirmala Sitharaman discloses fiscal deficit targets for FY25, with market expectations set at 5.3 percent. Additionally, potential benefits can arise from housing and MSME incentives.
HUL (CMP: Rs 2,475) and Maruti Suzuki (CMP: Rs 10,161) – Consumption-related stocks could see gains if there are adjustments to income tax slabs, resulting in increased disposable income for consumers (Budget 2024). Maruti Suzuki stands to benefit from incremental announcements related to auto PLI and FAME schemes. HUL’s performance may be influenced positively if significant measures are taken to support the rural economy.
