Budget 2024 Top Picks: PSU Stocks NBCC, IRCON That Climbed By 50-100% YTD Are Attractive Bets

Infrastructure projects are likely to be a key focus during the Union Budget 2024 announcement by Finance Minister Nirmala Sitharaman which is scheduled in late July. The upcoming budget is seen as the extension of the interim budget where the PM Modi-led government raised capex by double-digit 11.1% for FY25.

In the interim budget 2024, Sitharaman announced that building on the massive tripling of the capital expenditure outlay in the past 4 years resulting in a huge multiplier impact on economic growth and employment creation, the outlay for the next year is being increased by 11.1% to Rs 11,11,111 crore. This will be 3.4% of the GDP for FY25.

PHD Chamber of Commerce and Industries (PHDCCI) in an interaction with the FM, made pre-Budget suggestions. PHDCCI suggests more focus on tier 2 and 3 cities with state-of-the-art infrastructure and smart villages with adequate facilitation of public utilities.

Sanjeev Agrawal, President of PHDCCI last month, "PHDCCI suggests 10 crucial points for the 100 day agenda of the new government including employment creation, double-digit growth in manufacturing, strengthening exports trajectory, state of the art infrastructure in tier 2 and tier 3 cities, policy to strengthen farm sector, addressing inflation escalations, enhancing the digital economy, strengthening women empowerment, inclusive health infrastructure and dedicated environment protection."

Railways, roads, transport, and highways are key infra sectors that utilised about 85% of budget allocations in 9MFY24.

With infra push in the picture during Budget, stocks like Texmaco Infra, NBCC, and IRCON are top picks.

NBCC Share Price:

NBCC has been involved in the execution of diversified projects in sectors such as Institutional, Housing, Industrial & Environmental, Transportation, Power, etc. since 1960 and though not from CSR funds, various public welfare projects have also been taken up and accomplished by the company.

On July 3, NBCC stock ended at Rs 169 apiece, up by 4.29% on BSE with a market cap of Rs 30,420 crore. The stock is near its 52-week high of Rs 176.50 apiece.

YTD, NBCC stock has skyrocketed by 107% on BSE.

IRCON International Share Price:

IRCON is a specialized construction organization covering the entire spectrum of construction activities and services in the infrastructure sector. However, railways and highway constructions, EHP sub-station and MRTS are core competence areas of IRCON. So far, IRCON has completed over 300 infra projects in India, and more than 100 projects across the globe in 21 countries.

By the end of July 3, the IRCON share price stood at Rs 276.10 apiece, marginally up on BSE with a market cap of Rs 25,967.64 crore. The stock is near its 52-week high of Rs 301.40 apiece. YTD, the stock zoomed by 58.45% on BSE.

During the interim Budget 2024, FM announced three major economic railway corridor programmes that will be implemented in FY25. The projects have been identified under the PM Gati Shakti for enabling multi-modal connectivity. They will improve logistics efficiency and reduce costs.

In her speech, she said in February that the resultant decongestion of the high-traffic corridors will also help in improving the operations of passenger trains, resulting in safety and higher travel speed for passengers. Together with dedicated freight corridors, these three economic corridor programmes will accelerate our GDP growth and reduce logistic costs. Also, she added, forty thousand normal rail bogies will be converted to the Vande Bharat standards to enhance the safety, convenience and comfort of passengers.

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