Budget 2023: Which sectors, themes and stocks should you bet on?

Some of the companies that will benefit from Budget 2023 announcements include those engaged in infrastructure development, hotels, manufacturing companies, companies working on green energy, and those supporting agriculture.

Budget 2023 Investment Strategy

In the last few years, the government has focused on taking measures that can boost economic growth, create job opportunities, and have a multiplier effect. Budget 2023 was another step in the same direction. In Budget 2023, the Finance Minister increased allocations to many sectors. In this article, we will understand how these increased allocations will benefit certain sectors, themes, and stocks related to them.

Sectors, themes, and stocks that will benefit from Budget 2023

1) Infrastructure
The government has increased the allocation to infrastructure by 33% from Rs. 7.5 lakh crores to Rs. 10 lakh crores. It is the highest-ever allocation done to infrastructure in any year. The government aims to revive an additional 50 airports, heliports, etc., to improve regional air connectivity. At the same time, the construction work of new airports will get a push.

The budget has provided a major allocation for railways (Rs. 2.4 lakh crores) and roads (Rs. 2.6 lakh crores). It will be used for building new railway lines, developing new stations, redeveloping existing stations, procuring wagons, etc. The work on metro railways is going on in many cities. The government will work with states to expedite the work on metro railways and identify and start work on new metro projects. The budgetary allocation for roads will be used to build new expressways, national and state highways, etc.

It will benefit companies that build or supply materials to companies that build airports, railways, metro rail projects, roads, sea ports, and related infrastructure.

Some of these companies include:

a) Road construction companies like IRB Infrastructure Developers, Dilip Buildcon, NCC Infrastructure, etc.
b) Railway companies like CONCOR Ltd., IRCTC Ltd., IRFC Ltd., Rail Vikas Nigam Ltd., Titagarh Wagons Ltd., etc.
c) Airport infrastructure companies like GMR, GVK, Adani, L&T, etc.
d) Port companies like Adani Ports and Special Economic Zone Limited, Gujarat Pipavav Port, etc.
e) Metro rail infrastructure companies like BEML, J Kumar Infraprojects, L&T, etc.
f) Steel, aluminium, and cement companies such as Tata Steel, SAIL, Hindalco, NALCO, UltraTech, ACC, Ambuja Cement, etc.

Also Read: Best Infrastructure Mutual Funds In India And Why You Should Invest In Them?

2) Domestic travel and tourism
Promoting domestic tourism was one of the focus areas in the Union Budget 2023. The travel and tourism industry has a vast potential for generating employment, and it can contribute meaningfully to the country’s economic growth. During her budget 2023 speech, the Finance Minister mentioned that 50 tourist destinations will be identified and promoted as a package. Border villages will also be developed as tourist destinations.

Some of the companies that will benefit from the above measures include:

a) Hotel companies like Indian Hotels, Lemon Tree, Mahindra Holidays, EIH, ITC, etc.
b) Travel service companies like BLS International, Thomas Cook, etc.

3) Domestic manufacturing
Since the introduction of the PLI schemes, the manufacturing sector has been on a growth path. Mobile manufacturing and rising exports are good examples of this. To encourage domestic manufacturing further, the government has reduced the import duties on certain components required for manufacturing mobiles, televisions, etc. At the same time, the Finance Minister increased the import duties on certain finished products to discourage imports and encourage domestic manufacturing of these products.

Companies that will benefit from the above measures include Dixon Technologies, Amber Enterprises, V Guard, etc.

Also Read: Top 10 Sectors To Make The Most Benefit From Budget 2023

4) Green energy transition
India is working on a war footing to fight climate change. Budget 2023 has identified green growth as one of the key areas to focus on. The Finance Minister mentioned green fuel, green energy, green farming, green mobility, etc., in her budget speech. The budget allocated Rs. 35,000 crores to be deployed for capital investments towards net zero transition.

Some companies working towards green measures will benefit from the Budget 2023 announcements. Some of these include:

a) Companies working on producing clean fuel like Reliance Industries, NTPC, etc.
b) Companies working towards storing and transmission of green energy like Powergrid, Tata Power, etc.

5) Agriculture and allied activities
Budget 2023 allocated Rs. 1.25 lakh crores towards agriculture and the welfare of farmers. The allocation will cover various government schemes for farmers like PM-Kisan, credit for farmers through Kisan Credit Card, animal husbandry, dairy, fisheries, etc. The government also aims to make natural farming a mass movement by allocating Rs. 459 crores for it. With this initiative, 1 crore farmers will be supported for natural farming in 3 years.

The various initiatives and allocations for agriculture are expected to benefit various companies, some of which include:
a) Tractor manufacturers like M&M, Escorts Kubota, Swaraj Tractors, etc.
b) Fertiliser companies like RCF, Coromandel International, Chambal Fertilizers, Tata Chemicals
c) An increase in farmer income will increase rural demand, which will be helpful for FMCG companies like HUL, ITC, Godrej Consumer, Britannia, etc.

Overall investment strategy
Apart from the above sectors, themes, and companies, many other companies will benefit from the Budget 2023 announcements. For your financial planning, it is recommended that you consult your financial advisor. They will construct an investment portfolio for you based on your risk appetite and asset allocation. You can have a core portfolio with broader market capitalisation-based equity mutual funds. The satellite portfolio can have an allocation to sectors, themes, and companies that will benefit from Budget 2023 announcements. It is recommended that you follow the systematic investment plan (SIP) mode.


Related Article

Premium Articles

Union Budget