Mr. Jyoti Roy – DVP- Equity Strategist, Angel Broking Ltd
It’s time for a new beginning as the Fiscal Year 2022 is just around the corner. The latest budget announcement has already been received with a thumbs-up from the stock market. Ever since the Finance Minister gave her budget speech from her swanky little Made-in-India tablet, the benchmark indices have already gained more than 9%.
But do you feel missing out on the action while going through the fine lines of this year’s budget? Well, you don’t need to. Here’s the #BudgetKaMatlab for you, something that will help you build your position in the market. You must look forward to these 5 segments and the stocks operating in them:
The government has made a host of announcements targeted at strengthening the BFSI sector, especially the Public Sector Banks. Some of them include recapitalization of Rs. 20,000 crores and incorporation of bad banks for stressed assets. Housing Finance Companies also stand to gain from the additional tax exemption of one year for Affordable Housing. Moreover, the FIs that issue credit to DISCOMs will benefit from the Rs. 3.05 lakh crores outlay intended over the next 5 years for DISCOM-centric schemes.
Stocks: Some of the stocks that you must add to your watch list including SBIN, BOB, LIC Housing Finance, Canfin Home, Power Finance Corporation, and REC.
This year, the FM has more than doubled the outlay for Health and Wellbeing to Rs. 2,23,846 crores in FY2022, up from FY2021’s Rs. 94,452 crores. It has further allocated Rs. 35,000 crores for the COVID-19 vaccine while also keeping room for increments.
Stocks: You must consider stocks such as Apollo Hospital, Narayana Hrudalaya, Cadila, and Cipla.
iii. Precious Metals, Gems, and Jewelry:
Though the custom duty for gold and silver has been decreased from 12.5% to 7.5%, Agriculture Infrastructure and Development Cess of 2.5% has been imposed on Gold, Silver, and Dore bars. The government will also charge a custom duty of 15% on Synthetic Cut and Polished Stones (Gems), up against 7.5% charged earlier. Indian jewelry companies stand to benefit at large from these developments.
Stocks: Include stocks of domestic players such as Titan Company and Vaibhav Global in your watch list.
In addition to PLI schemes, the government has announced a mega investment in Textile Parks. Custom duty has also been reduced on Nylon Chips, Nylon fibre, Caprolactam, and yarn from 7.5% to 5%. The move should pave the way for multiple, global success stories of Indian textile players.
Stocks: Some of the stocks that will gain steam include Siyaram Silk Mills, Arvind Ltd., and Vardhman Textiles alongside others.
- Solar Pumps:
As India drives towards the much cleaner and greener future, it’s a nice idea to diversify your portfolio into green segments going forward. This year, the government has increased the custom duty on solar lanterns and solar invertors from 5% to 15% and 20% respectively. It will encourage domestic production and some of the leading players will benefit.
Stocks: You can include stocks such as Shakti Pumps and Crompton Greaves Consumer Electricals to your watch list in FY2022.
With the majority of this year’s Union Budget decoded, it’s now time to use this #BudgetKaMatlab to make some real gains. May the ‘market force’ be with you!
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