So Markets are bleeding with approx. with closing in red for consecutive 5 days. This is nothing to worry we think it as a profit booking before a big event. And since the start of January we are constantly advising our clients to book all your exceptional profits and sit on cash as much as possible, since we can see the correction and eventually this got true market got corrected approx. 700-800 points from it top of 14753. Everyone is eying on the budget after the Covid-19 pandemic which has left the whole world in complete shutdown for approx. 3 months.
Honorable Finance Minister has raised the expectation by promising that this budget to be “Like Never Before”. This budget will be challenging for the government since fiscal deficit is still not under control, divestment plan is almost much delayed, increasing expectation from citizens due to Covid-19 pandemic, decreasing income tax and indirect tax collection and much more.
So I am very much interested that how our Finance Minister will tackle all this situation , how she make everyone happy including common man , industrialist , market participants ( like us ) and every other stake holders.
This budget will be completely paperless due to Covid-19 pandemic and the government has launched the Mobile App “Union Budget” on Play Store so everyone can view the budget documents very easily.
Market Expectation From Budget FY 2021-2022
- Increased Basic Tax Exemption Limit
- Increased Health Deduction under Section 80D
- Roadmap on Public Health and Vaccination Rollout
- Roadmap on Job creation ( since many people have already lost their job due to Covid-19 Pandemic ).
- And many more like PLI schemes, LTC benefits increased standard deduction for work from home employees etc.
Earnstock Expectation From Budget FY 2021-2022
With the Union Budget approaching, markets are building conservative stances in hopes that the government will focus on growth and introduce reforms to boost the economic recovery post pandemic. According to experts, the government will have to strike a balance between growth and fiscal in the budget this year.
We will watch for Government fiscal deficit target and government projection for GDP growth rate. And reforms taken by the government to boost the job creation in urban and rural areas. Government roadmap for planned $5 trillion dollar economy, government plan for divestment in some big PSU like BPCL, LIC etc. Government expenditure in proportion to GDP to boost post pandemic economy recovery.
Our key expectations from Budget FY 2021-2022 is not from reduction in Income tax etc but we are more watchful on promotion of Atam Nirbhar Bharat Scheme ( to reduce dependence on China ), government GDP growth projections and how will they create balance in between Fiscal deficit and economy growth.
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Stocks might get benefited from Budget as per our expectations.
Hero MotoCorp ( CMP : 3385 ) , Ashok Leyland ( CMP : 112 )
Government may push the automobile sector like introduction of scrappage policy to boost economy and growth. As per our expectation Ashok Leyland is the biggest beneficiary of the scrappage policy or increased spending in infrastructure.
In Two wheeler segment Hero MotoCorp is the biggest beneficiary, since their is health concerns in using public transports etc.
Exide Industries ( CMP : 197 )
Theme : Electric Vehicle
Government should promote on development of electric vehicle and government might announce some things like Product linked schemes related to battery manufacturing etc. With the setup of TESLA office in India, electric vehicles can be the next biggest theme in the coming decade.
BHEL ( CMP : 36 )
BHEL has huge waste land , so as per some sources ( Of Zee Business ) also that Government is also planning to monetize those vacant land which will directly benefits BHEL. And there is also another view of divestment of PSU and we think BHEL is the perfect next candidate for divestment.
BAJAJFINSERV ( CMP : 9006 ) , HDFCLIFE ( CMP : 674 ), ICICIBANK ( CMP : 526 )
I don’t want to comment on banking and financial sectors , but in case if any positive comments in the upcoming budget these three stocks will be biggest beneficiary.
DLF ( CMP : 259 ), INDIABULLS HOUSING FINANCE ( CMP : 192 )
We are most bullish on real estate sector and we even reiterate that that Real Estate might be the next Pharma in 2021.
We have already recommended DLF in Diwali Pick and stock has already given 50% return in 2-2.5 months.
We are again reiterating our view in Real Estate sector that it can give good returns in coming months but be very selective in choosing the real estate stocks.
TATAPOWER ( CMP : 76 )
Theme : Electric Vehicle , Green Energy
If electric vehicle is promoted then we needed the chargers in pan India and government will not only promote vehicle manufacturers but government should also come up with a incentives to promote setting up of charging stations and as per our expectation Tata Power will be the biggest beneficiary.
Disclaimer : We are not SEBI Registered Investment Advisors , rather we are registered Authorized Person only so don’t take this as on advice and consult your financial advisor before taking any position.