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Unlocking Budget 2024: JM Financial’s Wish List and Stock Impact Insights

March 17, 2025
Smart Money

Budget 2024 Expectations: JM Financial Outlines Key Insights and Sector Winners

As anticipation builds for the presentation of India’s Budget 2024 by Union Finance Minister Nirmala Sitharaman, scheduled for July 23, JM Financial has released a detailed analysis highlighting key expectations, priorities, and stock market implications. The brokerage firm emphasizes a balanced approach by the government, focusing on fiscal discipline, capital expenditure (capex), and social welfare initiatives.

Balancing Fiscal Goals with Economic Growth

JM Financial asserts that the upcoming Budget aims to address the fiscal deficit while enhancing capital investment and supporting social programs. The firm suggests that maintaining the current framework for capital gains tax would contribute positively to market sentiment.

“Markets are keenly awaiting any adverse changes in the capital gains tax on equities. An unaltered capital gains tax framework would be regarded positively for the Indian equity market,” the report notes.

The government is expected to uphold its capex plan of ₹11.1 lakh crore for the financial year 2024-2025, maintaining its fiscal deficit target at 5.1% of GDP, which aims for a reduction to 4.5% by FY2025-2026. ## Key Themes of the Union Budget

The primary themes outlined by JM Financial include:

  • Continuation of existing infrastructure projects across sectors such as railways, defense, and renewable energy.
  • Increased budget allocations to enhance rural economic development and job creation.
  • A strategic focus on achieving the ‘Viksit Bharat’ vision for India by the year 2047. The report highlights potential government welfare spending backed by a significant Reserve Bank of India (RBI) dividend, estimated at ₹2.11 lakh crore, which could be allocated towards enhancing rural livelihood initiatives such as the Pradhan Mantri Awas Yojana (housing for all) and PM Kisan (support for farmers).

Sector-Specific Implications

Agriculture, Fertilizers & Chemicals

With a noted fertilizer subsidy provision of ₹1.64 lakh crore anticipated for FY25, JM Financial expects important allocations for enhancing agricultural productivity and infrastructure. Key beneficiaries include companies like Coromandel International, Chambal Fertilizers, and PI Industries, which stand to gain from moves to adopt advanced technologies and boost productivity in the sector.

Automotive and Ancillaries

The prospect of increased rural discretionary spending boosts optimism for two-wheeler manufacturers like Mahindra and Mahindra and Hero MotoCorp. There are also expectations for enhanced subsidies under the FAME-III initiative, benefiting major players such as Ashok Leyland and Tata Motors.

Banking, Financial Services and Insurance (BFSI)

Measures aimed at encouraging affordable housing development, especially in rural areas, are anticipated to positively influence stocks serving this segment, including Aavas Financiers and Aptus HFC. Additional tax reliefs on banking deposits could also enhance the overall performance of banking stocks.

Cement and Construction

With a proposed increase in the allocation for the Pradhan Mantri Awas Yojana (PMAY) to build millions of homes, cement companies such as UltraTech Cement and Ambuja Cements may benefit significantly from this increased governmental focus on infrastructure.

Fast-Moving Consumer Goods (FMCG)

Tax adjustments aimed at expanding tax slabs or increasing limits on investments under Section 80C could lead to heightened disposable income, benefiting FMCG giants like Dabur, HUL, and Nestle. However, there is caution for companies like ITC if potential excise duties on tobacco products are raised.

Industrial and Infrastructure

An uptick in capital expenditure for defense and rail infrastructure is seen as a positive development for stocks like Bharat Electronics and Hindustan Aeronautics. In the broader infrastructure space, companies such as KNR Construction and PNC Infratech may also benefit from increased allocations.

Conclusion

As India gears up for the Budget 2024, JM Financial’s insights provide a noteworthy perspective on the prevailing economic landscape and potential sector winners. The government’s strategic balancing act of fiscal prudence alongside developmental agenda stands to shape the trajectory of multiple industries, delineating clear pathways for investors to navigate the upcoming fiscal year.