Interim Budget 2019: 20 stocks to buy that are likely to benefit the most

Benchmark indices are likely to move sideways but investors should be better off placing themselves in select sectors which are likely to get benefit the most from the Interim Budget.

The interim Budget FY20 was carved to perfection to woo farmers, middle-income group, creating more jobs and providing some relief to the MSME sector. But, what about the investors?

Although there was nothing special for the investor community at large but D-Street is taking comfort in the fact that the fiscal deficit number did not exceed much from the target and the measures announced in the Budget are likely to support earnings of companies in consumption, consumer discretionary, agri-related sectors and to some extent healthcare companies.

The fiscal math assessment is more relevant for FY19 as FY20 numbers will get substantially changed with the formation of the new government after the 2019 General Elections. Benchmark indices are likely to move sideways but investors should be better off placing themselves in select sectors which are likely to get benefit from the Interim Budget.

“Budget is reflationary, with 13 percent spending growth on the back of 14 percent growth in FY19. The budget is clearly geared toward electoral expediency with a significant focus on uplifting the farm and housing sectors, job creation, and alleviating the distress in the MSME sector,” Emkay Global said in a report.

“The reflationary stance of the Budget could provide a boost to corporate earnings, especially in consumption, agri-rural sector, retail lending, and housing, there can be implications for inflation and interest rates as well,” it said.

Emkay Global has maintained its Nifty target range of 11,000-10,400 but continues to remain cautious on mid & smallcap stocks. It is 'overweight' on IT services, pharmaceuticals, BFSI (primarily private banks), and specialty chemicals; 'equalweight' on auto & auto ancillaries, consumers, oil & gas, metals & mining, and fertilizers & agro-chemicals; and 'underweight' on capital goods, construction & infra, cement and telecom.

The global investment bank, UBS maintained its Nifty base case of 10,000 for December 2019, and remained 'selectively overweight' on consumer discretionary and neutral on autos. It remains 'underweight' on industrials/infrastructure sectors.

For autos, the Budget will support entry-level 2-wheelers, especially in rural areas, but will unlikely benefit premium bikes, MCHV and tractors, it said.

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