Is there an investment opportunity in PSP Projects shares?

The benchmark equity index BSE Sensex vaulted over 3,000 points in two trading sessions after the Union Budget outlined a slew of measures to pull the economy out of the pandemic-induced slump.

Going with market analysts, the Union Budget 2021-22 was clearly growth focussed with a sharp increase in capital allocation (up around 26% YoY), and outlining manufacturing as the key pillar for the economy.

The budget has also outlined the additional financial avenues to attain the same, through setting up Development Financial Institution (DFI), monetisation of infra assets and divestment plans of a non-core asset.

Here are top stocks which brokerage ICICI Securities believes could benefit from Union Budget 2021:

Infrastructure:
Budget beneficiaries: Larsen & Toubro, UltraTech Cement
Comment: Budget allocation of Rs 5.54 lakh crore for infrastructure spending, Rs 2 lakh crore to states and further Rs 20,000 crore for setting up DFI should create a robust tendering opportunity for L&T.

Hospitals
Beneficiaries: Narayana Hrudayalaya, Apollo Hospital, Shalby
Comment: Proposes PM AtmaNirbhar Swasth Bharat Yojana to be launched at an outlay of about Rs 64,180 crore over six years. Among others, it includes establishing critical care hospital blocks in 602 districts and 12 central institutions. We expect the government to involve private hospital players via PPP model as proposed by the Niti Ayog in sync with NHP 2017.

Apparels & Accessories
Beneficiary: Titan Company
Comment: Rationalisation of custom duty on gold from current 12.5% to 7.5% could be positive for Titan’s jewellery division as a reduction in gold prices may lead to enhanced demand for gold grammage and lower import via an unofficial channel.

Textiles
Beneficiaries: KPR Mill, Gokaldas Exports, Arvind Ltd
Comment: To enable the textile industry to become globally competitive, a scheme of Mega Investment Textiles Parks (MITRA) will be launched in addition to the PLI scheme. This will create world-class infrastructure with plug & play facilities to enable create global champions in exports. Seven textile parks will be established over three years.

Auto and auto ancillaries
Beneficiaries: Ashok Leyland, Tata Motors, JK Tyre, Apollo Tyres
Comment: 1) Support to the commercial vehicle space through the allocation of Rs 18,000 crore for procurement of over 20,000 buses for urban transport. It is aimed to be implemented deploying PPP model. 2) Announcement of voluntary scrappage policy for commercial vehicles of over 15 years of age and private vehicles of more than 20 years of age.

Irrigation
Irrigation: Mahindra EPC Irrigation
Comment: Doubling the corpus fund under Nabard for micro-irrigation at Rs 10,000 crore vs Rs 5,000 crore earlier.

FMCG
Beneficiaries: ITC, VST Industries
Comment: No tax or duty increases on cigarettes is a relief for cigarette companies. We have seen stable taxation on tobacco post-GST implementation in the last three years with only one-year tax increase (only in 2020 Budget).

Oil and gas
Beneficiaries: IOC, Gail
Comment: Oil & gas pipeline assets of IOC and Gail will be monetised under Asset Monetisation Programme. This move will help to unlock the value of the pipeline business for companies and will be value accretive to shareholders.

City gas distributors
Beneficiaries: Indraprastha Gas, Mahanagar Gas, Gujarat Gas, Adani Total Gas & Gail
Comment: In the next three years, 100 districts will be added to existing CGD network. Addition of new areas will provide an incremental opportunity of volume growth for CGD companies.

Asset management firms
Beneficiaries: HDFC AMC, Nippon AMC
Comment: Aggregate premium on unit-linked products higher than Rs 2,50,000 to be disallowed benefit under section 10D wherein it will be taxable and capital gains will be charged like mutual funds.

Banks
Beneficiaries: All PSU Banks
Comment: Divestment of two PSU banks in a bid to expedite long-awaited reforms bode well for multiple re-rating of all PSU banks.

Road and highways
Beneficiaries: PNC Infratech, KNR Construction
Increase in roads and highways capex allocation by around 17% YoY at Rs 1,08,230 crore to boost order inflows for road EPC players.