Share Market Budget 2024 Expectations Highlights: Top Stocks to watch (2024)

India, with its colossal information technology workforce, a thriving research community, and a burgeoning technology ecosystem, stands poised at the forefront of global artificial intelligence (AI) development. The surging demand for Software as a Service (SaaS) products and services infused with AI has notably catapulted this sector into the spotlight. Recognizing the transformative potential of AI in reshaping economies, the government think-tank NITI Aayog took a crucial step by unveiling the National Strategy on Artificial Intelligence in 2018.

NITI Aayog, in its forward-looking approach, advocated the creation of Centres of Excellence (CoEs) to fortify AI development and stimulate application-based research. Fast forward five years, and AI has not only made its presence felt across sectors but has secured a recurring mention in the Union Budget, the country’s most crucial financial document. In presenting the Union Budget 2023-24, Finance Minister Nirmala Sitharaman articulated a vision to ‘Make AI in India and Make AI work for India,’ signalling a commitment to harnessing AI’s potential for technological renaissance.

Also Read: Decoding AI Sector’s Union Budget 2024 Wishlist for a Technological Renaissance

“At Yatiken Software Solutions, our expectations for Union Budget 2024 align with key areas crucial for the IT sector’s growth. We look forward to potential allocations for EV infrastructure development, presenting exciting opportunities in software for EV systems, IoT integration for smart charging, and data analytics for EV performance optimization. Additionally, we hope for a significant GST relaxation for the service sector, leading to a reduction in the 18% GST rate. This move would alleviate operational costs for IT firms, enhancing global competitiveness and providing resources for further innovation and talent development. Besides that, initiatives for upskilling programs in emerging technologies such as AI, blockchain, and cybersecurity are critical for the continuous growth of the tech industry. Collaborative efforts between educational institutions and industry partnerships can ensure a skilled workforce. Likewise, the establishment of tech-focused Special Economic Zones (SEZs) holds promise, offering tax benefits and infrastructure support to attract foreign investments and foster innovation in the IT sector. Moreover, investments in internet adoption and 5G deployment, especially in healthcare, could create opportunities for developing applications in telemedicine, remote monitoring, and data-driven healthcare solutions. These expectations, if addressed in the Union Budget, have the potential to remarkably shape the trajectory of the IT sector by fostering innovation, supporting infrastructure development, and enhancing skills in emerging technologies,” said Alok Kashyap, Founder and CEO at Yatiken Software Solutions.

Over the last 5 days, TCS shares have seen a notable downfall of 1.68%, and in the last month, the growth has been substantial, up by just 1%. Assessing the medium and long-term performance, the stock has delivered exceptional returns, recording a surge of 12.17% in the last 6 months and an 11.77% gain over the past year. Year-to-date, the stock has jumped by just 0.70%.

The shares of Texmaco Rail have gained over 10.11% in the last 5 days and almost 17% in the last month. However, considering the medium and long term, the stock has shown impressive returns of 115% in the last 6 months and almost 267.59% in the last year. Year-to-date, the stock has jumped over 18.68% until now.

“To be vocal for local, and to facilitate ‘Make in India’ and promote ‘Ease of doing business’, the FinMin must look into amending the present SEZ Act so that SEZs could be better integrated in the domestic market. The budget should look at permitting ‘reverse job-work’, which allows SEZs to sell in the domestic market where all duties relinquished on raw materials could be paid back. The move will prevent companies present in these zones from being disadvantaged due to a lack of access to the entire market. It will allow them to sell domestically, also offering a waiver on all duties on raw materials. The move will also lead to further strengthening the SEZs of India, which have emerged as major export hubs in the country. However, in recent times it has started losing its value due to the imposition of minimum alternate tax and the introduction of a sunset clause to end fiscal incentives. This has resulted in many SEZs lying vacant, hurting the economic growth. The policy will put SEZs on an equal footing with non-SEZ units that enjoy the benefits of zero or reduced import duties through free trade agreements,” said Mr. Colin Shah, MD, Kama Jewelry.

The recent performance of DLF shares shows that the shares gained by just 1% in the last 5 days and nearly 9% in the last month. Taking a broader perspective, the stock’s medium and long-term returns are striking, with an impressive surge of 51.80% in the last 6 months and more than 123% in the last year. Year-to-date, the stock has jumped by 8.82% till date.

Over the last 5 days, Ajmera Realty & Infra India shares have seen a notable decrease of just 1%, but in the last month, the growth has been substantial, reaching almost 28.42%. Assessing the medium and long-term performance, the stock has delivered exceptional returns, recording a surge of 46.46% in the last 6 months and an impressive 111.39% over the past year. Year-to-date, the stock has jumped by a noteworthy 28.42%.

In anticipation of the Union Budget 2024–25, Axis Securities has provided a detailed outlook on key sectors and expectations, encompassing higher capital expenditures, increased rural spending, and fiscal consolidation. The brokerage identifies several sectors poised to benefit from the upcoming budgetary allocations.

Power, Utilities, and Renewables are anticipated to receive additional support, with a particular focus on companies in the Railway, Infrastructure, and Capital Goods sectors. The brokerage foresees positive impacts on FMCG and Autos driven by augmented rural spending.

Also Read: Axis Securities highlights five key sectors that may benefit from this interim budget 2024

One of the golden rules of the market is “Never time the Market”. The most popular method of investing among retail investors is to invest via SIPs – And there is data to prove this – where a SIP started at the top of a market in 2008 vis-à-vis one which was started at the low of the market in 2009 has delivered a XIRR with only a marginal difference. So in the long term it doesn’t really matter when you start investing – especially if it’s an index fund or a well managed active fund.

However, it’s also a fact that investing in stock markets is a psychological game. The investors’ behavioural pattern determines the returns. We always have a 20/20 vision when we look back at the opportunities available but it’s important to gauge how we would have behaved in the midst of a said situation. Someone who had invested at the peak in January 2008 at around Nifty ~6350 would have witnessed the portfolio erode 57 pct by December 2008 at Nifty ~2750.

Also Read: Navigating market uncertainties: Lessons on patience, psychology, and prudent investments

The Union Budget has long been a significant influencer in the Indian market, often synonymous with heightened market volatility. Over the past 24 years, specifically during budget sessions on February 1, data reveals that only in 7 instances did the Indian market move less than 1 percent on the budget day.

In the most recent budget session on February 1, 2023, Indian indices experienced a mixed outcome after an extremely volatile session. The Sensex closed 158 points, or 0.27 percent, higher at 59,708.08, while the Nifty ended at 17,616.30, down 46 points, or 0.26 percent. Notably, this marked the first time since 2018 that Indian indices moved less than one percent on the budget day, with the market ending nearly flat in 2018, down just 0.1 percent.

Jefferies speculates that post-election measures, such as higher capital gains tax, may be implemented during the year. Additionally, the brokerage foresees an increase in disinvestment post-elections, leveraging the strong performance of PSU stocks in sectors like railways and defence.

Despite these challenges, Jefferies remains optimistic about the capex cycle, emphasizing that 75% of the capex in the economy is driven by housing and private corporate activities, both of which have considerable upside potential over the next few years.