40 stocks that emerged sureshot beneficiaries from Budget 2020

The Union Budget 2020 failed to meet the sky-high expectations of Dalal Street. But a series of moves to address issues in the agriculture, infrastructure and financial sectors in a bid to revive growth in the economy are going to create conditions for some businesses to flourish.

Analysts said a handful of stocks are set to draw large benefits from the Budget as the government continues to remain generous with the rural economy with several proposals to increase farm income, which can in turn revive consumption.

In her Budget speech, Finance Minister Nirmala Sitharaman reiterated the government commitment to double farm income by 2022, and proposed to liberalise the agriculture sector.


She unveiled a bundle of schemes, including higher crop insurance coverage, a robust warehouse and cold chain infrastructure to ensure better storage of farm produce, and another scheme called Kisan Rail in PPP mode to facilitate faster movement of perishable goods.

“We believe the strong emphasis on rural consumption bodes well for the long term,” said Reliance Securities, which turned bullish on a couple of stocks from agriculture and infrastructure sectors besides a few banks after the Budget.

Top post-Budget picks of the brokerage included tractor maker Escorts (target price: Rs 1,075), commercial vehicles producer Ashok Leyland (Rs 111), cement manufacturers JK Cement (Rs 1,500) and UltraTech (Rs 5,500), capital goods major Larsen & Toubro (Rs 1,670), power stock Kalpataru Power (Rs 573), private lenders ICICI Bank (Rs 650) and HDFC Bank (Rs 1500), KNR Construction (Rs 275), engineering firm HG Infra (Rs 400) and gas distributor Gujarat Gas (Rs 249).


The government set aside Rs 2.83 lakh crore for agriculture and irrigation sectors, and allocated Rs 3.60 lakh crore for the Jal Jeevan Mission, which aims to ensure piped water supply to all households.

Analysts expect the schemes to create more demand for pipes used in agriculture, irrigation and for domestic water supply. “These measures are positive for Astral Polytechnik, Finolex, Supreme Industries, Shakti Pipes,” IDBI Capital Market said.

The budgetary allocation for the Ministry of Road Transport and Highways has gone up to Rs 91,823.22 crore from Rs 83,016 crore last financial tear. Budget announcements for roads, railways, economic corridors, solar power generation and accelerated development of highways are expected to boost select infrastructure, construction, capital goods and cement stocks.

With the aim to boost infrastructure financing, the government announced 100 per cent tax exemption on interest, dividend and capital gains earned from infrastructure investment by Sovereign Wealth Fund.

IDBI Capital Markets came up with ‘buy’ ratings on Dilip Buildcon (price target Rs 717), PNC Infratech (TP Rs 259), KNR Construction (TP Rs 324), Ashok Buildcon (TP Rs 198) and Sadbhav Engineering (TP Rs 170).

In the financial space, the Finance Minister increased deposit insurance cover on bank savings by five times to Rs 5 lakh per account from Rs 1 lakh at present. There are hopes that it would help banks to draw public deposits.

The government also proposed a credit guarantee scheme for the NBFC sector, which has been facing liquidity crisis ever since the IL&FS scam surfaced nearly one-and-a-half years ago.

IDBI Capital Markets said the measure would provide temporary liquidity to the NBFC sector and provide a boost to the shadow bankers. The brokerage turned bullish on four lenders, Axis Bank (target price Rs 817), Federal Bank (Rs 110), HDFC Bank (1,490) and IndusInd Bank (Rs 1720).

Among NBFCs, it gave ‘buy’ ratings to HDFC (TP: Rs 2625), Manappuram Finance (Rs 220) and Muthoot Finance (Rs 710).

For the consumer and retail space, the Finance Minister raised customs duty on footwear by over 1,000 basis points to 35 per cent and on furniture by 500 basis points to 35 per cent.

Analysts expect companies like Trent, Bata, Khadim, Relaxo, Shoppers Stop and Future Lifestyle Fashions to gain from this move.

Ajit Mishra, VP Research, Religare Broking, says Subros, L&T, Dixon Technologies, Container Corporation may benefit from the announcements related to their respective sector. Additionally, the abolition of dividend distribution tax (DDT) would be positive for PSUs like Coal India as well as MNCs P&G and HUL.