Aamar Deo Singh, Senior Vice-President of Research at Angel One, offered his insights on the potential effects of the Union Budget, which sectors might benefit, the expected performance of PSUs, and recommended investment strategies post-budget.
Last week, despite initial volatility, the markets rebounded and celebrated the Union Budget 2024 by reaching new all-time highs. The previous budget had set a record capex of ₹10 lakh crore and introduced policies that boosted various sectors, leading to a strong rally in Indian equities over the past year.
According to ACE Equity data, the BSE Sensex has risen 23% in the past 12 months up to July 26, while the broader BSE MidCap and BSE SmallCap indices have outperformed the Sensex, gaining 58% and 57%, respectively. Sectoral indices such as BSE PSU, BSE Realty, and BSE Capital Goods have also seen substantial gains.
In an interview with Business Today, Aamar Deo Singh, Senior Vice-President of Research at Angel One, provided insights on the Union Budget for FY24-25. He discussed its expected impact on the economy, which sectors might benefit, the performance of PSUs, and investment strategies post-budget.
Singh noted that the Budget addresses issues like job creation and demand slump by increasing allocations for agriculture, affordable housing, and employment incentives, aiming for inclusive growth. Sectors expected to benefit include FMCG, infrastructure, manufacturing, housing, agriculture, and power.
Regarding PSUs, Singh highlighted their recent strong performance and the favorable investor interest. He attributed their improved profitability to government investments in infrastructure and manufacturing, including railways and defense. However, maintaining high profitability will be challenging due to the larger base and macroeconomic factors.
Sectors like FMCG, IT, Pharma, infrastructure, and housing remain attractive in the current bull market, though investors should be cautious of high valuations. Singh advised focusing on quality stocks and considering investments in tranches.
Looking ahead, Singh is optimistic about Indian equities and the economy but cautioned that markets might experience turbulence due to global factors and inflation. Historical data suggests that equities have outperformed other asset classes, so a long-term perspective is crucial for investors.
