Budget 2019! This is where your money should be; stocks that will put hefty money in your account

Budget 2019: D-day is here for PM Narendra Modi and FM Pyush Goyal as Budget 2019 presentation day is here! Everyone across India is sitting with bated breath to find out if a new change for the country will be announced. It's the budget that will set the course for Prime Minister Modi government for the looming Lok Sabha elections 2019. While India might see some reform measures or sops announced announced that can impact everyone from farmers to taxpayers, but an investor must still place his money in stock exchanges wisely. Investors in benchmark indices Sensex and Nifty 50, along with Indian rupee, will be ready to pounce on investment opportunities, or even selling opportunities, that open up as per FM Piyush Goyal announcements while presenting Budget 2019. One can expect, stocks on Dalal Street to perform on a cautious note and not knee-jerk manner and this makes it even more appealing for investors. Why? Because, in the longer term equities tend to make investors richer than any other option. Yes it's quite true! 

Interim Finance Minister Piyush Goyal, who will be standing next to PM Modi in the House, will be announcing the interim budget soon and it may set new benchmarks for the country's fiscal deficit, disinvestment, revenue, exports, expenditure and imports. On the same lines, more benefits and new rules will be unveiled for many sectors. Apart from this, even citizens investment, housing loan, income, tax payments amongst others will be taken into consideration.

So, get set and prepare your own budget for investing in stocks for this fiscal and beyond. While considering the market has been highly volatile over the past few months, it becomes of utmost importance to identify the right stocks at the right time and make the move. Yes, Budget 2019 can help you decide your investment journey on Dalal Street going forward.

On Budget 2019, Amnish Aggarwal, analysts at Prabhudas Lilladher, sounded a warning, “We retain cautious view on markets in 1HCY19 given headwinds like:

 1) political uncertainty in run up to 2019 elections

 2) rising rural distress given low Agri prices and drought in parts of Maharashtra, Karnataka and Gujarat

 3) GST shortfall and

 4) delay in much awaited capex cycle."

Aggarwal added, “Although 27% decline in Brent prices, 2.3% inflation (food deflation) has provided some comfort, bond yields have increased by 36bps after correcting from a high of 8.2% shows market anticipation of big fiscal hit led by measures like expected farm package of Rs2000bn or BPL pension. Markets at 18.7xFY20 still trade at premium to LTA (17.3) after factoring in 19.3% PAT growth for FY20 (5.8% CAGR in last 10 years), We believe Nifty will have a strong support at ~10000. We see markets being range bound in run upto 2019 elections.”

Check Your Hot Stocks! 

In Aggarwal’s view, any move on corporate tax rate, LTCG or DDT can be positive for the markets as a whole. Any measures like farm package, tax relief or BPL pension will boost demand.

Therefore, Aggarwal directs that domestic consumption stocks will benefit from these reforms, and hence they become your top picks on exchanges. 

These stocks are - ITC, HUL, Britannia, Dabur and 2 Wheeler companies (TVS Motors).

In case of private banks and consumer finance companies, stocks like HDFC Bank, ICICI Bank and Bajaj finance will gain from rising consumer spends.

Because of farm package announcement in Budget 2019, companies like M&M, PI Inds and Coromandel International seem good bets in the Auto and Agri space.

According to Reliance Securities as well, there are few stocks which one should eye for as an investment plan. These are: 

Rural spending will help consumer stocks like Escorts, HUL, Dabur and Colgate. Raising tax brackets is likely to help discretionary spending.

Railway spending is likely to rise further. Roads, infrastructure and real estate are likely to see some push. The key stocks to see the impact are: L&T, KEC International, Ahluwalia Contracts, NCC and UltraTech.

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In Pharmaceuticals space, the government could increase tax exemption for preventive health check-ups, which will benefit the diagnostic companies/pathological laboratories. Healthcare will be a key focus area for the government. 

If the governments rolls over the fuel subsidy shortfall of ~Rs150bn to FY20, then ONGC and Oil India may not witness subsidy pressure. In power sector, rural electrification will continue to remain in focus. NTPC and Power Grid will be the key beneficiaries.

Analysts at Reliance say, “Though “Make in India” drive could help the Engineering R&D companies; the budget does not have any meaningful impact on IT and Telecom companies per se.”

From the above it can be said, there is a lot to buy on this Budget 2019, which will make you rich in coming days. If you plan to invest today in equities, then you might want to have a look at the mentioned stocks. Let your Budget 2019 reap benefit for you in your money-wise!