Budget 2022: L&T, Ambuja Cement, Gati, Prince Pipes among 15 stocks from infra & allied space set to benefit the most from India's Capex drive

The Budget 2022-23 has pegged India’s economic growth at 9.2%, highest among major economies around the world, with special focus on infrastructure expansion in Financial Year-23. For FY23, Finance Minister Nirmala Sitharaman stepped up capital expenditure sharply by 35.4% to Rs 7.50 lakh crore in 2022-23(2.9% of GDP) against Rs 5.54 lakh crore in the current year. A go ahead to 100 PM GatiShakti cargo terminals, 25,000 Km of highway projects for FY2023 and 400 new generation Vande Bharat trains and similar provisions are likely to help many stocks in the long run.  

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.  

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Abhay Agarwal, Founder & Fund Manager, Piper Serica, SEBI Registered Portfolio Management Service Provider, too feels that the biggest beneficiaries are infrastructure companies and their ancillaries. Based on the capex hike and other announcements, below are the top picks from Infra and allied space identified by Arihant Capital and Hem Securities.  

Construction and Engineering- Top Pick-Larsen & Toubro  

One of the India's largest construction companies is poised to be the biggest beneficiary of Capex drive in India. "National Infrastructure Pipeline & GatiShakti will act as pillars for growth, while strong projects for roads, highways, metros and railways will also aid this stock, says Hem Securities.  

400 new generation Vande Bharat trains will be manufactured in the next 3 years and over 2,000 km of railway network will be established under Project KAWACH.  Capacity building for Infra projects will also help Ashoka Buildcon and KNR construction, says Arihant Capital.  

Cement-Top Pick- Ambuja Cement 

Ambuja Cement: With expansion of highways, masterplan for expressways and allocation of Rs 199,107.71 crore to Ministry of Road Transport and Highways, cement demand is likely to remain robust. The company's capacity expansion plans and MSA agreement will continue to yield good results. Cost efficiency in terms of being lowest cost producer will also help Orient Cement, as per Arihant Capital. Besides, Premiumization strategy would support growth supported by healthy financials. Ambuja cement and Ramco cements are other top picks from this space. 

Wires and cables -Top Pick- Polycab India 

A Strong player in wires & cables segment, Polycab India will be benefited from the boost to construction activities & infrastructure due to capex drive.   

Transport & Construction -Top Pick- Agarwal Industrial Corporation  

It is the largest private player of Bitumen in India, and with Rs20,000 core to be spent on National Highways for 25000km expansion, this stock from construction space becomes the first choice.   

Construction& design -Top Pick- GR Infraprojects: With the experience in design and construction of various road/highway projects across 15 states, GR Infraprojects is another pick that is likely to benefit from Capex drive. Besides, this design and construction firm also forayed into railways and water infrastructure.    

Logistics -Top Pick- Gati  

Introduction of unified Logistics Interface platform to enable swifter movement of goods will help Gati. It will benefit from focus on seamless transport, capacity augmentation & multi model logistical services. Allcargo, VRL Logistics and Adani Port are other stock picks from this space set to benefit with Unified Logistics Interface Platform allowing data exchange among all mode operators. 

Pumps and Pipes -Top Pick- Prince Pipes and Fittings Ltd 

Prince Pipes and Fittings is amongst India’s top 5 players in the plastic pipe segment. With a strong track record of Industry leading volume growth, it is likely to benefit from the capex theme of the budget along with Harghar jal scheme, which was allocated Rs. 60000crore in the budget.  

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)