Budget 2023: With the Union Budget less than a month away, a section of the market is eyeing the infrastructure allocation as they expect major announcements.  

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

According to Roop Bhootra, CEO of Investment Services, Anand Rathi Shares and Stock Brokers, the budget could have some major focus areas on infrastructure this year. 

“This sector has received a mix of direct and indirect boosters to the jobs and economy as a whole. Infrastructure is critical as it provides a thrust to GDP growth and also reduces the cost of doing trade and commerce,” Roop said. 

Also Read: Budget 2023: Why agri stocks are in focus prior to Budget 

Sectoral allocation 

Experts believe that the capital expenditure target or Capex target could be Rs 9-10 lakh crores.

Vikas Gupta, CEO and Chief Investment Strategist, OmniScience, said the Capex target in the budget could be in the range of Rs 9 lakh to Rs 10 lakh crores. With additional grants to the states, the total could be as high as 12 per cent. 

He added that with the current government in the final legs of its term, the budget push could be even higher to complete significant milestones by the end of the term.

Sanjay Moorjani, Research Analyst, SAMCO Securities believes that the government’s Capex outlay will certainly be higher than the previous Budget. He, however, said that the Budget might not see a steep increase of around 35 per cent as was seen in the previous two Budgets. 

Moorjani added that with improving capacity utilization, pick-up in credit offtake leads to signs that private Capex is rebounding. A further government push in Capex would boost private sector Capex too.

Infra stocks in focus 

Vikas Gupta said that the market is likely to focus on private infrastructure companies and capital goods companies. However, "we would suggest a stock-by-stock analysis in terms of their balance sheet strength, cash flows and valuations before jumping into the sector." 

SAMCO Securities recommends KEC International due to its robust order book showing revenue visibility for 2 years. According to them, it has an experience of more than seven decades in the Engineering, Procurement, and Construction (EPC) segment, which drives around 50 per cent of its revenues. The cooling off inflation, newer orders at higher commodity prices, and execution of the last leg of SAE projects would propel the company’s margins to expand.

Click here to get more updates on Stock Market I Zee Business Live