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    Going long on infra can cement winning portfolio

    Synopsis

    Analysts anticipate infrastructure-led companies to see the benefits of the budget proposals in the second half of the next financial year and drive the re-rating of these companies. The government proposed to raise capital expenditure by 33% for FY24 to ₹10 lakh crore.

    infraAgencies
    The budget has allocated the the highest-ever capital expenditure for the railways at ₹2.4 lakh crore for FY24
    The budget initiatives toward capital expenditure to boost urban infrastructure, housing, and transport sectors are expected to give a fillip to capital goods, industrials, metals, and cement stocks.

    Analysts anticipate infrastructure-led companies to see the benefits of the budget proposals in the second half of the next financial year and drive the re-rating of these companies. The government proposed to raise capital expenditure by 33% for FY24 to ₹10 lakh crore.

    Capital goods and cement companies such as Larsen & Toubro, ABB, and UltraTech Cement will benefit the most from the massive outlay of government capex plans, said Hemang Jani, head of equity strategy, broking and distribution at Motilal Oswal Financial Services.

    "Private capex cycle has been strong in the past two years, and the government proposals towards infrastructure would keep the growth momentum to continue going forward," said Jani. "At a broad level across the capital goods, cement, construction and infrastructure sectors, capacity utilisation levels stand around 70-80%, driving the need for expansion in capacities and therefore enhanced expenditure."

    "The government outlay augurs well for the order book over the next three to four years which was not visible about a couple of years ago. The cement sector looks attractive and will be a clear winner in the times ahead," said Siddhart Bhamre, head of research at Religare Broking.

    The budget has allocated the the highest-ever capital expenditure for the railways at ₹2.4 lakh crore for FY24. The Centre has identified 100 critical transport infrastructure projects, for last and first-mile connectivity for ports, coal, steel, fertiliser, and foodgrains sectors, and earmarked ₹75,000 crore.




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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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