Post Budget Quote on stock selection By Utsav Verma Head of Research - Institutional Equities, Choice Broking
Below the Post Budget Quote on stock selection By Utsav Verma Head of Research - Institutional Equities, Choice Broking
Budgets are always a tight rope walk for the government and this government has commendable balanced fiscal prudence (fiscal deficit target reduced sharply to 4.4% of GDP compared to 4.8% last year), provided consumption boost (income tax relief with no income tax up to income of 12L under new regime), fine-tuned public capex (revised to INR10.18T from INR11.1T due to spending delays) and leaned on private capex to pick up. No negative surprises or imaginative ways to fund the deficit is a big plus.
We expect the budget to be positive for consumption oriented sectors such as private sector banks, FMCG and consumer discretionaries such as autos, hotels, food, textiles, leather goods and retail. RBI had already taken liquidity measures last month and now the path seems set for interest rate cut which should further be positive for the outlined sectors. Capex plays such as infra, defense and railways haven't been ignored given the current capex allocation will be difficult to spend this fiscal. .
Choice Institutional Equities believes that right stock selection across market caps remains very important given global geopolitics, strong dollar index and higher US bond yields and its impact on FII flows along with pockets of over valuation across sectors. Some of our high conviction ideas include:
Maruti Suzuki India (MARUTI)- Target Price- 13,958, Rating- BUY
TVS Motors (TVSMOTOR)- Target Price-2,936, Rating- BUY
Mahindra & Mahindra (M&M)- Target Price-3,466, Rating-BUY
Bajaj Auto (BAJAJ-AUTO)- Target Price- 9,854, Rating- BUY
Gabriel India (GABRIEL)- Target Price- 565, Rating- BUY
Hero MotoCorp (HEROMOTOCO)- Target Price- 5,314, Rating- BUY
Lumax Industries (LUMAXIND)- Target Price- 2,622, Rating- BUY
ICICI Bank (ICICIBANK)- Target Price- 1,503, Rating- BUY
Federal Bank (FEDERALBANK)- Target Price- 222, Rating- BUY
Bharat Electronics Ltd. (BEL)- Target Price-370, Rating- BUY
Apollo Pipes (APOLLOPIPE)- Target Price- 503, Rating- BUY
Ultratech Cement (ULTRACEMCO)- Target Price- 13,246, Rating- BUY
JK Cement (JKCEMENT)- Target Price- 5,532, Rating- BUY
Piramal Pharma (PPLPHARMA)- Target Price- 315, Rating- BUY
Yatharth Hospital (YATHARTH)- Target Price- 628, Rating-BUY
Narayana Hruduyalaya (NH)- Target Price- 1,405, Rating- BUY
Sun Pharmaceuticals (SUNPHARMA)- Target Price- 2,200, Rating- BUY
PSP Projects (PSP PROJECT)- Target Price- 760, Rating- BUY
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