Top stock picks for 2024 ahead of Modi 3.0’s first Union Budget: Financial experts

As the anticipation builds for the Union Budget 2024-2025, the Indian stock market continues its upward trajectory, reaching new heights fueled by robust investor confidence and favorable economic indicators. In light of the upcoming budget, financial experts have highlighted key stocks that are poised to benefit from anticipated government policies and sectoral growth.

Market Outlook

The Indian market is currently experiencing a strong bullish phase, characterized by frequent milestones and new record highs. On June 27, the benchmark Nifty index crossed the 24,000 mark for the first time, reaching a record high of 24,174 points on June 28. This surge reflects growing investor optimism, bolstered by positive economic signals, policy stability, and increased foreign investment.

Key Stock Recommendations

Leading financial analysts have identified several stocks expected to perform well ahead of the Union Budget. Here are the top picks across various sectors:

Infrastructure and Defence

1. Larsen & Toubro Ltd (L&T)

Current Market Price (CMP): ₹3,605.85

Target: ₹4,300

Potential Upside: 19%

Rationale: With an anticipated allocation of ₹11,11,111 crore for infrastructure, L&T is set to benefit significantly. The company projects a 10% growth in order inflow and aims for a group revenue of ₹2.7 lakh crore by FY 2025-2026, with an EBITDA margin of 8.25%.

2. Hindustan Aeronautics Ltd (HAL)

CMP: ₹5,283

Target: ₹5,819

Potential Upside: 10%

Rationale: HAL, a major player in the defense sector, is expected to gain from the ₹6.22 lakh crore defense budget. The company has a strong order book of ₹94,000 crore, ensuring robust future revenues.

3. Titagarh Rail Systems Ltd

CMP: ₹1,767

Target: ₹2,030

Potential Upside: 15%

Rationale: As a leader in rolling stock manufacturing, Titagarh will benefit from the government's ₹2.55 lakh crore allocation for railway infrastructure and initiatives like the PM Gati Shakti.

Housing Finance and Renewable Energy

4. HUDCO (Housing and Urban Development Corporation)

CMP: ₹210

Potential Upside: 30% (in 3 months)

Rationale: HUDCO is exhibiting strong technical momentum and solid financial performance, making it a favorable choice ahead of the budget, which is expected to provide cheaper financing options for housing.

5. IREDA (Indian Renewable Energy Development Agency)

CMP: ₹200

Potential Upside: 25%

Rationale: IREDA is well-positioned to benefit from increased budget allocations for renewable energy, and the stock is showing strong fundamentals, indicating a potential breakout.

Technical Picks

6. BHEL (Bharat Heavy Electricals Limited)

Buy Range: ₹295-297

Stop-Loss: ₹285

Target: ₹320

Rationale: BHEL's stock shows strong support and a consolidation breakout, suggesting the start of an uptrend backed by high trading volumes.

7. WIPRO

Buy Range: ₹501-506

Stop-Loss: ₹480

Target: ₹560

Rationale: WIPRO's stock has broken out from a consolidation phase, supported by higher trading volumes, indicating a bullish outlook.

8. Praj Industries

Buy Range: ₹680-685

Stop-Loss: ₹645

Target: ₹760

Rationale: The stock is forming a bullish pennant pattern on the daily chart, suggesting a continuation of the upward trend.

9. BEL (Bharat Electronics Limited)

Buy Range: ₹295

Stop-Loss: ₹283

Target: ₹340

Rationale: BEL is maintaining a higher highs pattern and trading above key moving averages, signaling a potential uptrend.

10. Tata Steel

Buy Range: ₹169-168

Stop-Loss: ₹158

Target: ₹185-190

Rationale: Tata Steel remains above the crucial 21-week EMA, with strong support levels, making it an attractive option for long positions.

Fundamental Picks

11. APL Apollo Tubes

CMP: ₹1595

Rationale: As India's largest structural steel tube producer, APL Apollo is set to benefit from the government’s focus on infrastructure and real estate.

12. Triveni Engineering

CMP: ₹395

Rationale: With a diverse portfolio in sugar and engineering, Triveni is poised to benefit from rising ethanol demand and government blending initiatives.

13. Ador Welding

CMP: ₹1338

Rationale: Ador Welding is experiencing strong demand in infrastructure and railways, and is expanding its market presence with new investments in automation.

14. Transport Corporation of India (TCI)

CMP: ₹923

Rationale: As the largest logistics service provider, TCI is well-positioned to benefit from the shift towards organized logistics and continued infrastructure support.

Other Expert Recommendations

15. Godrej Agrovet

Target: ₹740

Rationale: With strong growth potential and effective cost management, Godrej Agrovet is undervalued and poised for significant gains.

16. SBI (State Bank of India)

Target: ₹950

Stop-Loss: ₹790

Rationale: After a short-term correction, SBI is showing a positive medium-term trend, supported by a higher bottom formation on weekly charts.

17. Reliance Industries Limited

CMP: ₹3027

Rationale: Reliance has broken out of a consolidation pattern with increased volume, signaling strong buying interest and a continued uptrend.

18. Praj Industries

CMP: ₹690

Rationale: Praj Industries has broken out of a rounding bottom pattern on the weekly chart, supported by increased volume, indicating strong buying momentum.

Conclusion

As the Union Budget 2024 approaches, investors are advised to keep an eye on these expert recommendations and consider sector-specific opportunities. Each stock listed has been carefully selected based on current market trends, technical patterns, and fundamental strengths. However, it's crucial to conduct thorough research and consult with certified financial advisors before making any investment decisions.

Disclaimer: The opinions and recommendations provided are those of individual analysts and brokerage firms, not Mint. Investors are encouraged to seek advice from certified professionals before making any financial decisions.