Stock Market Highlights: Experts see infra, banking among other sectors benefitting the most from Budget 2022

FM Nirmala Sitharaman shares government's priorities - it is not inflation - READ

Union Finance Minister Nirmala Sitharaman on Wednesday shared the Modi government's priorities, saying inflation has cooled down in the last few weeks and that it is not a 'red lettered' priority. Speaking at the India Ideas Summit, she said that the Centre's priority is job creation and income distribution. She also sought to highlight that India is taking up the G20 president-ship in challenging times when global supply chains have been damaged and geo-political equations are volatile. She added that uncertainties in the energy sector were an area of concern for the government. Full Report

Domestic equity markets cheered the announcements made by Union Finance Minister Nirmala Sitharaman in the Budget 2022-23 as the benchmarks ended nearly 1.5% higher on Tuesday. There were positive announcements being made for infrastructure and allied sectors, telecom, sugar, jems & jewellery, agriculture and defense sectors. In view of the recent announcements made in the budget, stock market experts are mostly bullish on infra, metal, renewable energy and manufacturing sectors.  

In a big boost to infra, FM Sitharaman announced an allocation of Rs 7.5 lakh crore towards capital expenditure for 2022-23, which is 35.4% higher than the ₹5.54 lakh crore allocated to capital expenditure last year. 

Speaking of sectors to benefit from this budget, Ashis Sarangi, SEBI registered RIA, Pickright Technologies, said the budget appears to be benefit infrastructure, banking, power and metal industries. 

He said the infrastructure industry, together with supporting industries such as metal, real estate, and cement, would be sectors to benefit the most with Rs 7.5 lakh crore allocation. It will also be beneficial to Banks & NBFCs. This capex spending will also push the private sector to spend more on capital goods," he said.   

"Additional Rs 19,500 crores to manufacture equipment for solar power under the PLI scheme and clean energy, may also help Borosil renewable, Tata Power & IEX," added Sarangi.   

Sonam Srivastava, Founder, Wright Research, is of the view that infrastructure, logistics, cement, capital goods, real estate, agriculture, digital & fintech players, sustainability and EV segments would see Budget announcements working for them.   

"PM Gati Shakti initiative and policies to ease the compliance burden and increase digitization announced in the Budget 2022 will help these sectors perform well going forward," said Sonam.  

Initiatives for the EV and green energy sectors like Battery swapping reforms, 19,500 Cr PLI for Solar PV modules and green bonds will aid new age sectors such as digital, Fintech and EV. "Paytm, Policybazaar, Tata Power, and Minda Industries would be the stocks to watch out for in this space, " added. Sonam.  

Abhay Agarwal, Founder, and Fund Manager, Piper Serica, SEBI Registered Portfolio Management Service Provider, said the biggest beneficiaries are infrastructure companies and their ancillaries. Other winners would be renewable energy & biofuels, healthcare, education and financial tech sectors, he said.  

Meanwhile, Sarangi said that the budget has failed to provide immediate assistance to rural income growth and has failed to stimulate rural consumption in the short run. " As a result, it will have a negative impact on the auto, FMCG, and white goods industries until the income situation improves," he added.  

Technical check post pubget closing: "Nifty witnessed wild swing with the bands of 17200 and 17600. On the daily chart a green candle with large lower wick is formed suggesting buying at the lower levels. The band 17200 and 17600 are likely to remain active during the near term. Any decisive breakout on either side can induce directional move," Rupak De, Senior Technical Analyst at LKP Securities. 

No headroom for cautiousness & populist measures: Vinod Nair, Head of Research at Geojit Financial Services. 

"It is a long-term growth oriented budget which the market has welcomed given no headroom for cautiousness & populist measures. It is expected to support growth in the future; however, it is missing some balancing measures in context of current inflationary & slowing economy. Supportive measures were needed for rural, agriculture, low taxpayers & for sectors impacted by the pandemic. High capex, fiscal deficit  & borrowing plans in the background of a high inflation, commodity & oil prices and rising interest rates will be challenges in the short to medium-term"
 

Street cheered the budget: S Ranganathan, Head of Research at LKP securities

"The Union Budget with its big tech push and capex thrust has used the fiscal space arising out of buoyant tax collections to spur growth and revive private capex. The street cheered the budget as Indices rose 1.5% with its usual share of volatility as India VIX dropped sharply below 20. The paradigm change seen in the digital push together with the narrative for urban development quite clearly signalled a pro-growth stance"

Budget 2022 corporate sector taxation: Anil Singhvi explains what changed in the taxation, talks about changes for charitable trust and more in conversation with Anil GIri

Watch here

Increase in capital expenditure a good sign for stock market: Nirmal Jain, Founder & Chairman, IIFL Group- FCA, tells Anil Singhvi

Watch Full Interview with Anil Singhvi here

Budget 2022: Budget is growth oriented from auto sector perspective

From an auto sector perspective, the Union Budget is growth oriented in nature with focus on capital expenditure and is positive for commercial vehicle segment, electric vehicles and tractor space. The key takeaways from the Budget in the auto space include: (i) Government stays committed to augmenting farm income via support to start-up ecosystem to drive technology application in farming; (ii) To further promote electrification, the government has proposed to come out with battery swapping policy, which also includes the concept of energy/battery as a service. This will help in developing requisite charging station ecosystem. The government plans to promote private sector to incur required capex in this domain.; (iii) Budget also includes robust allocation of | 7.5 lakh crore (up 35% YoY) as capital expenditure for FY23E, a big positive for commercial vehicle space, especially M&HCV segment & (iv) Concessional tax rate for new manufacturing set-ups at the rate of 15% is extended by one year. It primarily implies that eligible commissioning date has been extended from March 31, 2023 to March 31, 2024. It is expected to drive private capex, going forward. Shashank Kanodia - Analyst, ICICIdirect 

Budget 2022 stock market reaction: Nifty, Sensex marginally slip

Benchmark indices Nifty50 and the Sensex saw minor correction from the day's high levels post Budget 2022 announcements. Stock market experts have dubbed it as non-populist, growth-oriented budget- one that caters to demand of all sectors. Nifty briefly slipped below 17,500, while the Sensex went on to touch 57,737.66 as its day's low. 

Budget 2022 reaction: BOOSTER SHOT FOR INFRASTRUCTURE SECTOR

"The Budget seems to be focused on high impact areas and accelerating the capital expenditure cycle. Setting Capital Expenditure target of Rs. 7.5 Lac Crores, increase of 35% vis-a-vis FY22 is a major shot in the arm for the Infrastructure sector and certainly much higher than market estimates. It is pertinent to note the reference towards investments into capacity building initiatives within the Infrastructure sector for much needed skill upgradation pertaining to Project Appraisal, Planning, Design and Project management including Technical and knowledge assistance coming from multilateral funding agencies. This certainly suggests reorientation of focus towards much needed planning, monitoring and supervision of the massive investments being planned and not just splurging towards unleashing the Capital Expenditure cycle," Sandeep Upadhyay, Managing Director – Infrastructure Advisory, Centrum Capital Limited. 

He said key beneficiaries are stakeholders in the Transportation and Logistics sector, where in Rs. 25,000 Crs is planned to be invested in FY23 in road sector along with further strengthening the ecosystem for Expressways. 100 new Cargo terminals to be built in next 3 years and manufacturing new generation 400 Vande Bharat trains with improved energy efficiency is a major push towards catalyzing manufacturing sector through robust demand being generated from the Infrastructure space.

Budget 2022: Where to park your money post Budget announcements? Which sectors are in focus, What is important in this budget and more

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Budget 2022 Reaction: Budget is progressive, addresses all major expectations from various sectors 

The budget is progressive and addresses all the major expectations from various sectors including Fintechs, EVs, MSMEs, Start-ups, etc. Allowing an extension of tax incentive by another year will hugely benefit the newly started ventures and will motivate the players to contribute to the macro-economic growth. The FM has suggested to setting up an expert committee to monitor mobilization of funds to start-ups through VCs and Private equities which is a major welcome step. The introduction of central bank digital currency will further boost the digital economy and will hugely benefit the Fintech ecosystem. With setting up of 75 digital banking units in next two years India is set to become a robust digital economy.-Ashish Jain, CFO, LoanTap

Budget 2022 Reaction: Government has resisted being populist despite big state elections 
Sorbh Gupta, Fund Manager- Equity, Quantum Mutual Fund
• The government continues to focus on the supply side through high allocation to CAPEX. While this is good for the long term, we believe a boost on the demand side through tax cuts would have helped the economy in the near term via higher consumption.
• The government has resisted being populist despite big state elections & which is a big positive.
• The domestic focussed cyclical sector like banks, materials & capital goods are expected to do well.

Budget 2022 Reaction- "The government continued with its pro-growth measures along with some fiscal prudence where manufacturing is a key theme where the government put focus through a sharp increase in Capex. The growth in the manufacturing sector will have a domino effect on different sectors to generate growth and employment. There is no negative trigger, therefore, the market will like the budget and if global cues will remain supportive then we can see new highs in our market soon," Sunil Nyati, Managing Director of Swastika Investmart Ltd. 

Budget 2022: It was very courageous not to make any changes on direct tax front: Deepak Parekh, HDFC Chairman 

Watch full interview here