Budget 2023: With the Union Budget only a few days away, some market participants may be looking for tactical wagers that could pay off if some of the policy expectations are met. With the government's continued emphasis on infrastructure and defence, equities such as IRCON International, PNC Infratech & KNR constructions, and Bharat Dynamics may find themselves in the spotlight.
Furthermore, the prospect of moderate growth due to an increase in railway capital investment has increased morale in the sector as a whole. It is assumed that the government would increase funding to the roads ministry in order to expedite the building of more than 50 kilometres of roads every day. Defence stocks will be under the limelight in the run-up to Budget 2023, with promises of increasing investment in local manufacturing.
These stocks are expected to be subject of interest in the run up to the Budget 2023:
IRCON internationals
This Indian Railroads wholly-owned subsidiary is an engineering and construction firm that specialises in key infrastructure sectors such as railways, highways, bridges, flyovers, tunnels, metros, and railway electrification. The company's order book was at Rs 40,020 crore as of September 2022. The order book was made up of 77 percent from the Railway sector, 18 percent from Highways, and 5 percent from other segments. Despite stiff competition, investors are encouraged by the company's great revenue visibility.
PNC Infratech and KNR Constructions
PNC Infratech and KNR Constructions are on Nomura's purchase list in the infrastructure sector because both businesses have been regularly producing operational cash flow and lowering debt. Nomura likes PNC Infratech because it has successfully converted its net debt to net cash. KNR Constructions has one of the best financial sheets in the industry because of successful asset sales.
Bharat Dynamics Limited
The corporation is one of India's largest defence PSUs, producing surface-to-air missiles, anti-tank guided missiles, air-to-air missiles, undersea weapons, launchers, countermeasures, and test equipment. In the next two to three years, the company's order book is likely to double to Rs 250 billion.
The government's increased emphasis on indigenous missile development is projected to result in a significant increase in Bharat Dynamics' order book.
Tata Power
To counteract climate change, various nations throughout the world, particularly India, are turning to renewable energy sources such as solar and wind. RK Singh, Union Minister of Power, New and Renewable Energy, has stated that by 2030, India will have more than 65 percent of its power generation capacity from non-fossil sources.
Following the induction of new investors into its renewable energy sector, Tata Power‘s Managing Director and Chief Executive Officer, Praveer Sinha, told the media in November that it expects to make further divestments in the next 12 to 24 months.
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