Budget 2024 – Welcome to this informative blog, where we will be discussing stocks that are in focus due to the budget announcements for 2024. In yesterday’s live stream, I provided a detailed analysis of the budget speech, which lasted for about an hour. Today, we will delve into specific stocks that may have a connection with the budget announcements. Please note that this blog does not offer any stock recommendations, and any investment decisions should be based on your own analysis. We will be focusing on long-term investment opportunities, spanning at least five years. Let’s dive right in!
Stocks to Watch After Budget 2024
Renewable Energy Stocks
One of the key strategies outlined in the budget is AmrutKal’s commitment to sustainable development and achieving Net Zero by 2070. The budget emphasized the importance of rooftop solarization, e-buses, and the increase in non-fossil fuel installed electric capacity. When it comes to stocks related to renewable energy, we can categorize them into two groups.
- Manufacturers of solar panels and windmills
- Financial institutions supporting the renewable energy theme
For manufacturers, three stocks worth considering are REC, PFC, and IREDA. REC and PFC are involved in financing power-related projects, from generation to distribution. IREDA specifically focuses on financing projects in the renewable energy space. While IREDA is fully dedicated to renewables, PFC has a higher share in the renewable energy sector. However, REC, PFC, and IREDA are all stocks to keep an eye on. Detailed comparisons of these stocks can be found in separate videos I have created for each company.
REC and PFC are involved in financing power-related projects, ranging from generation to distribution. IREDA specifically focuses on financing renewable energy projects. While IREDA is fully dedicated to renewables, PFC has a higher share in the renewable energy sector. However, REC also plays a significant role in financing renewable projects. A comparison of these three stocks reveals that REC has a lower stock PE (10 ka), higher ROCE (9.14), and a sales growth of 16%.
On the other hand, PFC has a lower stock PE (8), similar ROE, and a sales growth of 9.46%. IREDA stands out with a higher stock PE (60), lower ROCE (8.17), and an impressive sales growth of 21.8%. It’s important to consider these factors and conduct a detailed analysis before making any investment decisions.
Tourism Stocks
The budget emphasised that tourism development will be a joint effort between the central and state governments. States will be encouraged to develop iconic tourist centres, attracting business and promoting opportunities for local entrepreneurship. Long haul sans interest credits will be given to states to advancement, alongside projects for port network and the travel industry foundation. Three noteworthy companies in the tourism sector are ITDC, EIH, and Indian Hotels.
- ITDC is a government undertaking in India.
- EIH is a flagship company of the Oberoi Group, housing key brands like Oberoi Trident and Maidens.
- Indian Hotels is a Tata group company, with main brands including Taj, Vivanta, and Ginger.
When comparing these stocks, ITDC is a small-cap company, EIH is a mid-cap, and Indian Hotels is a large-cap. While all three stocks have a higher PE ratio than the industry average, EIH is relatively closer to the industry average. ITDC performs better in terms of Roe and Roc, while EIH has the highest sales growth. It is essential to conduct a thorough fundamental analysis before making any investment decisions.
ITDC is a government of India undertaking, while EIH is the flagship company of the Oberoi Group. Indian hotels, a Tata group company, operates under various brands such as Taj, Vivanta, and Ginger. These hotels are directly connected to the tourism industry and can benefit from the focus on tourism development. When analysing these stocks, ITDC has a higher stock PE (98), better Roe and Roc, and a sales growth of 21.8%. Indian hotels has a lower stock PE (61), while EIH is closer to the industry average with a stock PE of 46. It’s important to consider other factors such as debt-to-equity ratio, profitability, and operational metrics before making any investment decisions.
Railways
The budget announced the renewal of approximately 40,000 bogies, which will be converted to Vande Bharat standards. This creates opportunities for companies manufacturing wagons as well as financial institutions supporting them. The prominent company in this sector is IRFC, which I have discussed in a separate video. Please refer to that video for more information.
The Indian railway sector has long been an integral part of the country’s economic landscape, playing a crucial role in transportation and connectivity. Investors keen on capitalizing on this vital industry often turn to railway stocks as a potential avenue for financial growth. In this article, we will delve into the dynamics of the Indian railway sector, examining the factors influencing railway stocks and providing insights into the investment landscape.
Defense
The budget highlighted the launch of a new scheme to strengthen deep tech technology for defense purposes, in line with the Atmanirbhar Bharat initiative. When considering defense stocks, two companies come to mind: HAL (Hindustan Aeronautics Limited) and BEL (Bharat Electronics Limited). HAL is engaged in manufacturing aircraft and helicopters, as well as their repair and maintenance. BEL is another reputable defense company worth exploring further.
HAL is engaged in the manufacturing, repair, and maintenance of aircraft and helicopters. It has shown strong profitability with sales at an all-time high, operating profit at 6,636 crores, and a profit before tax (PBT) of 6,805 crores. BEL is another reputable company in the defense sector worth exploring. As with any investment, it is essential to conduct a thorough analysis of the fundamentals before making a decision.
Conclusion
In this blog, we discussed stocks that are worth monitoring after the budget announcements for 2024. We covered renewable energy stocks, tourism stocks, railways, and defense. It is crucial to conduct a comprehensive analysis of these stocks before making any investment decisions. Remember, this blog does not provide stock recommendations. Now, it’s your turn! In the comments section, please share your top two picks from the budget with your analysis. I will read through the comments and pin the best analysis.
Disclaimer: The information is only for information purpose only. It is always recommended to consult with certified financial experts before making any investment decisions. Follow busymoneyfreak.com .