With the booming stock market that gave return to investors in 2023, the budget for 2024 has only added the cherry on thepie. The 2024 budget has boosted many sectors such as railways, housing and construction, green energy including solar panels, defence, tourism and microfinance.
Defence: The Indian government has kept its focus on strengthening national security and ensured that the 2024 budget has 11.11 lakh crores allocated to the defence sector.
Companies to watch out for: The major companies likely to see growth are Hindustan Aeronautics Ltd (HAL), Bharat Forge, Bharat Dynamics, Astra Microwave, drone manufacturers, defence suppliers and major defence technologies.
Energy: The government is aggressively promoting solar energy through rooftop photovoltaic panels. In order to reach at least 10 million households with solar systems, the government is aiming to produce up to 300 units of electricity per house per month. This would be a big step towards easing the pressure on traditional coal or oil-based energy. In the long run, this would be beneficial.
Companies to watch out: Solar energy scheme and its goals can be achieved with help from Borosil Renewable, Tata Power, Waaree Renewable, IREDA, Adani Green, Sterling and Wilson, etc.
Housing: As the government announced a scheme designed for the middle class to purchase or construct homes. With a large middle class population, the housing sector will boom and it will spill positive impact on connected sectors such as banks and finance companies for home loans, construction materials such as cement, steel, home electricals as primaryand electronic appliances, and furniture as secondary beneficiaries.
Companies to watch out for: The major companies likely to benefit from this are LIC, HDFC, NBCC, HUDCO, Ultra Tech, ACC, Polycab, and major electronics.
Microfinance: With aggressive “Atma Nirbhar Bharat”, and other schemes, the government of India is pushing for self-reliance. To support these goals, Micro, Small, Medium Enterprises (MSME) and micro financing are playing a crucialrole in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth.
Companies to watch out for: Credit Access Gramin, Equitas, Fusion Micro, ESAF Small Bank, Bandhan Bank, Ujjivan Financial Services etc.
Railways: With new business lines such as port connectivity, energy, cement, and mineral corridors and high demand for enhanced infrastructures to support high speed trains, Indian railways will perform better in the next couple of decades.
Companies to watch out: Rail Vikas Nigam, Titagarh, Jupiter Wagon, Texmaco Rail, Siemens, Indian Railway Finance Corporation etc.,
Tourism: The Indian government will push individual state governments to develop tourism within their states. With the rise in income and travel interest among youngsters, state governments will promote religious and traditional tourism. It will need to explore potential as well as existing tourist locations. To support growth in this sector, there will be demand for upgraded infrastructure, connectivity, facilities. The government will work with the private and public sectors to meet demand.
Companies to watch out for: online ticket portals (yatra.com, easemytrip.com), IRCTC, ITC, Indian Hotels, Mahindra Holidays etc.,
These are the main sectors I think we can focus on.
Disclaimer: Please note that I am NOT a SEBI registered investment advisor. I am passionate about stock market and a voracious reader about stock market investments.
Please do your own research or talk to your investment manager before investing in any companies mentioned in the article.