Infra, manufacturing may get Jaitely thumbs-up: Sharekhan

MUMBAI: The AAP landslide win in Delhi will clearly weigh on finance minister Arun Jaitley's mind when he presents the Union Budget later this month. While the results could be an indication that Indians are getting impatient with the Modi government, there is lot of optimism from investors who are are expecting Jaitley to announce bold reforms that will catapult Indian economy back on track.

The Union Budget is a critical event and would give glimpse into the Modi government’s policy road map to revitalize India’s economy, says Sharekhan report.

The brokerage, based on government’s stated priorities, has identified three investment themes and stocks that stand to benefit from them not only in run up to the Union Budget but can also potentially evolve as structural growth stories.

These themes include policy initiatives in line with ‘Make in India’ call, low-cost housing/sanitation & clean water and progress in implementation of goods & services tax/urban consumption.

"Big areas in manufacturing where FDI can be attracted are defense, railways and engineering products/capital goods. The best picks to play this theme are manufacturers with established global footprint or leadership in niche areas,” the report said.

Sharekhan sees a larger role for housing finance companies with focuson tier II/III towns and relatively small ticket home loans. Discretionary consumption and FMCG companies are likely to benefit from implementation of GST.

Following are the stocks that are likely to benefit from the above mentioned investment themes.

Make In India campaign: Bharat Electronics, L&T, Bharat Forge, Triveni Turbines and Suprajit Engineering.

Social Infrastructure: LIC Housing Finance, CanFin Homes and Capital First, Va Tech Wabag and Supreme Industries

Implementation of GST: Thomas Cook, Century Plyboards, Dish TV, Berger Paints, Cox & Kings, KDDL