Which Sector Stocks May Benefit From Union Budget 2022-23?

Fertilizers and agrochemicals

The government is likely to continue to boost the income of the farmers and the outlay on the agricultural sector is likely to improve. We believe stocks from the agro, pesticides and fertilizers would do well. Speculative interest might also begin in some of the sector stocks.

Infrastructure

Infrastructure spending is likely to get an impetus in the forthcoming budget. In fact, without the same, India might find it hard to grow the economy. Stocks of those companies that are engaged in road construction, bridges, dams, airports etc., may benefit. Infra spending in the budget is almost a done deal.

SME/MSME

We believe that the MSME, SME sector may also receive an impetus. This is one sector that tends to get hit hard by lockdowns and curfews. While stocks from this sector are not listed, we believe the industry is likely to benefit from the Union Budget.

Real estate

It's hard to say, if there would definitely be benefits for the real estate sector directly. We believe that this is one of the places where employment generation is the highest. So, there is a possibility of something happening here, but, it would be interesting to wait and watch.

There are some worries that the Union Budget may increase the level of long term capital gains tax on shares. It's hard to speculate on any outcome of the Union Budget 2021-22, but, we believe that the government would not like to disturb the stock market apple cart at the moment, given that the LIC IPO is round the corner. Already, the markets are plagued by worries of higher interest rates and at this stage it might result in a massive knock to the markets.