Broad Strokes, July 23, 2024

Impact on Stock Market

• Indian stock markets experienced volatility post-Budget 2024 announcement, with the Sensex and Nifty initially dropping but recovering slightly.
• Key highlights: long-term capital gains tax increased to 12.5%, short-term capital gains tax to 20%, and securities transaction tax on futures and options hiked.
• Financial services stocks declined due to lack of major banking sector reforms; experts advise a cautious approach due to tax changes impacting investor sentiment.

Budget 2024-25 Analysis

• Mixed sentiment from experts like Prashant Jain, Manish Jain, Rashesh Shah, and Shashank Srivastava towards Budget 2024-25 fiscal measures.
• Positive views on fiscal consolidation and job creation but cautious on manufacturing and industrial stocks due to valuations.
• Focus on macroeconomic stability and fundamentals, with attention to the Budget’s potential to stimulate growth despite tax hikes.

Budget 2024 boosts investment and growth

• Optimism towards a growth-oriented agenda focusing on infrastructure, consumption, and fiscal prudence.
• Key insights: lower cost of capital driving capex and growth, equitable taxation, and potential investment sectors like private banks, IT, auto, and retail.
• Budget aims to boost job creation, rural development, and small businesses with a focus on balancing growth drivers and fiscal consolidation.

Shrimp farming stocks

• Budget 2024 announcement of support for shrimp farming led to a surge in shares of companies like Apex Frozen Foods, Avanti Feeds, and Waterbase.
• Significant plans to boost exports through shrimp farming initiatives, including major BCD cuts and NABARD financing support.
• Focus on agriculture, rural development, and job creation expected to stimulate growth in the sector.

Realty and Broking stocks

• Realty stocks declined due to removal of indexation benefits on long-term capital gains tax, affecting companies like DLF, Brigade Enterprises, and Godrej Properties.
• Nifty Realty index plummeted over 4%, reflecting investor concerns; major players experienced significant drops.
• Broking stocks like Angel One and Motilal Oswal saw a positive uptick initially despite increased STT and capital gains taxes.

Agriculture and FMCG stocks

• Significant impact on agriculture and FMCG stocks with measures aimed at boosting farmer incomes, rural infrastructure, and renewable energy investments.
• Stocks like Escorts Kubota, Kaveri Seeds, Dabur India, and Tata Power poised to gain from government initiatives.
• Higher rural consumption driven by social sector spending expected to benefit FMCG companies like Hindustan Unilever and Nestle India.

Custom Duty Cut Boosts Jewellery Stocks

• Jewellery stocks surged as customs duty on gold and silver was cut to 6%, benefiting companies like Titan, PC Jeweller, and Senco Gold.
• Reduction in import costs expected to boost demand and curb smuggling, supporting formal retail players and enhancing competitiveness.
• Duty cut welcomed by industry players, potentially reshaping the industry landscape.

GIS-based land records for tech companies

• Shares of tech companies MapmyIndia and Genesys surged following the Budget 2024 proposal for digitizing urban land records via GIS mapping.
• Specific focus on rural land-related reforms expected to enhance mortgage underwriting and financial positions of urban bodies.
• Gensol Engineering’s stock soared after securing a contract for solar projects, contributing to significant profit rise.

Budget 2024 boosts infrastructure and construction stocks

• Significant impact on infrastructure and construction stocks, particularly in Andhra Pradesh, with companies like Andhra Sugars, KCP, and Amara Raja Energy seeing stock price increases.
• Special financial support of Rs 15,000 crore for Andhra Pradesh announced, fueling positive market sentiment.
• Focus on infrastructure development and road connectivity initiatives leading to bullish sentiment for companies like NCC, Ultratech Cement, and IRB Infrastructure Developers.