A.S.I.B.A.S.

STOCKS BENEFITING FROM BUDGET

Banks

Private Sector - Government to incentivise credit, debit card transactions.

Public Sector- Government intends to announce autonomous bank board bureau and aims for farm credit of Rs 8.5 lakh crore in FY16 (PNB,SBI,BOB would be the major benefitters)

Power (generation & distribution) To increase target of renewable power to 1,75,000 MW, set up 5 ultra mega power projects(stocks like Tata Power, Reliance Power, NTPC, Suzlon would be the major benefiters.

Finance

All NBFCs with size of over Rs 500 cr will get access to SARFAESI (stocks like HDFC, Shriram Transport Finance would be the major benefiters)

Diamond Cutting & Jewellery & Precious Metals

Govt to introduce Indian-made gold coins to reduce demand for foreign coins and proposes to introduce gold monetisation schemes. (stocks like Gitanjali Gems, PC Jwellers would be the major benefiters)

Microfinance

Allocation of Rs. 5300 crore in micro irrigation. Aim for farm credit of 8.5 lakh crore and 20000 crore for mudra bank. (Stocks to benefit would be SKS Micro & Jain Irrigation would be the major benefiters)

Analyst: D K Aggarwal, CMD, SMC Investments and Advisors Ltd

Renewable Sector

Being a high priority area, the budget 2015-16 decided to increase the target of renewable power to 1,75,000 Mw. The budget has attempted to address the short-term challenges for the power sector, and at the same time had laid a roadmap for more comprehensive measures over the medium to long-term as well. The solar energy sector will give a deserving boost to solar companies to increase generation capacity, which is currently a mere one per cent of the country's total energy production.

Healthcare Insurance/ Healthcare

Union Budget 2015-16 was expected to be formative for at least the insurance sector as India's participation in insurance was limited to enterprises whereas insurance as a product is aimed first for the unmitigated lower income group and middle class. Social security and financial inclusion are stepping stones to insurance. Specifically, increase in health insurance premium tax benefit from Rs 15,000 to Rs 25,000 and for Sr citizens Rs 30,000 was much awaited and expected. Also, Finance Minister Arun Jaitley allocated Rs 33,150 crore for the healthcare sector.

Defense Sector

In the budget 2015-16, the allocation for defence for the next financial year will be Rs. 2,46,727 crore as against Rs. 2,22,370 crore in the current year. The government has increased the foreign direct investment (FDI) cap from 26 percent to 49 percent hoping to get more global players into the sector that is currently dominated by Indian companies. The government has also arranged for FDI beyond 49 percent but only on a case-to-case basis with the approval of Cabinet Committee on Security.

Cement

From Japanese investment on road infrastructure to boost in manufacturing sector, from developing symbolic monuments to building smart cities, Housing for all by 2022. The government is plugging all leakages in infrastructure that makes cement an inevitably important sector. The industry has big players with quality management and state of the art infrastructure and will serve as a strength provider to the overall economy.

Infrastructure

Finance minister has underlined its commitment to reviving the investment cycle by increasing public expenditure in capital formation. The government has announced an overall increase of Rs.70,000 crore in investment in infrastructure in 2015-16 over the current year. As stated in the budget Public investment in the new fiscal year will be Rs.1.25 trillion higher than the revised estimates of the last year, of which Rs.70,000 crore will be directed towards capital expenditure. The allocation in the roads sector has been increased by Rs.14,031 crore and that in railways by Rs.10,050 crore. Finance minister, emphasized the need revisit and revitalize the Public Private Partnership or PPP model of infrastructure development. The introduction of tax-free infra bonds for railways and roads are likely to benefit the sector.

courtsey: ET