Stocks in Focus Due to Budget 2024: Key Insights

In this post, we look at some stocks that are drawing attention due to the budget announcements of 2024. Knowledge gained from the comprehensive analysis of the budget's impact on these stocks could provide strategic advantages for long-term investing.

3 Key Takeaways:

1. The renewable energy and tourism sectors are slated for increased growth following the budget allocations.
2. Renewable Energy Corporation (REC), Power Financing Corporation (PFC), and IRADA are key stocks to watch in the renewable sector.
3. Stocks related to tourism, such as ITDC, EIH Ltd., and Indian Hotels, have the potential for growth based on the budget's focus on tourism development.

Focus on Renewables

The budget gives absolute importance to sustainable development, with a commitment to Net Zero by 2070 and a focus on rooftop solarization, e-buses, and non-fossil fuel installed electric capacity. Stocks related to these domains are likely to see significant movement.

Key Stocks:

There are two categories of companies here. First, the manufacturers of solar panels or wind turbines, and second, those financing the renewable theme. Three such financing companies are:

1. REC: Primarily involved in financing power related projects - power generation to distribution.
2. PFC: Much like REC, this company also finances power-related projects.
3. IRADA: Focused on financing only renewable energy projects.

Though IRADA is entirely renewable-based, PFC has given a higher share in the renewable sector, with a share of 32% against IRADA's 31%.

Tourism Sector

The budget encourages the development of iconic tourist centers to promote local entrepreneurship. Here are three stock contenders in the tourism and hospitality sectors that could potentially capitalize on the budget boost:

1. ITDC (Indian Tourism Development Corporation),
2. EIH Ltd., a flagship company of the Oberoi Group, which manages the brands Obelisk, Trident, and Maidens.
3. Indian Hotels, a Tata group company managing brands like Taj, Vivanta, and Ginger.

The financial implications of the budget can positively impact these hotel-based industries. Indian Hotels, in particular, displays commendable sales, operating profit, and increased operating profit margin percentages. Their results show a sales all-time high and an operating profit at an all-time high.

Railways

Railways are a notable aspect of the budget, with noticeable plans for renovating bogies in line with V Bharat standards. An apparent stock candidate in this domain is IRFC, which would finance these initiatives.

Defense

The budget outlined a new scheme for strengthening deep tech technology for defense purposes and expediting 'Atmanirbhar Bharat.' Defense sector companies like Hindustan Aeronautics Limited could potentially benefit from this scheme as they specialize in manufacturing aircrafts, helicopters, their repair, and maintenance.

Note: It's essential to undertake a deep fundamental analysis of these stocks to gain a more comprehensive understanding of their potential. Always remember that these insights are meant to serve as a starting point for more detailed investigation.

Your Participation

To round off the analysis, we'd love to hear your thoughts on two other potential stock picks from the 2024 budget. We invite you to share your top two picks along with your analysis in the comments below — let's learn together!