InvestorQ : Can you tell me 3 stocks to buy after the budget announcement and 3 stocks I should sell out after the budget?
Niti Shenoi made post

Can you tell me 3 stocks to buy after the budget announcement and 3 stocks I should sell out after the budget?

Answer
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Archita Jajjoo answered.
1 year ago


Let us look at what stocks to buy first.

State Bank of India is clearly a stock you should be buying. The focus on recapitalizing banks with Rs.70,000 crore, issue of sovereign bonds to reduce pressure on domestic bond markets and the big NBFC funding opportunity will be positive for SBI.

Bajaj Finance will be an NBFC that will benefit as the gap between the solvent and profitable NBFCs and other NBFCs widens. Bajaj Finance will not only see greater share of the consumer finance market but also better valuations.

L&T and Ultratech could be the major beneficiaries of the infrastructure thrust. The government is planning to infuse nearly Rs.100 trillion into infrastructure in the next five years and these two companies could be the big beneficiaries in terms of order flows.

Let us now turn to stocks that you should be cautious of

HPCL and BPCL could be the two companies that could lose out due to the higher excise duty and the road cess on oil. That is likely to compress the profit margins of these companies in the coming quarters.

You must be cautious about jewellery companies like Titan that have already rallied in the last one year. The higher import duty on gold at 12.5% from 10% will increase the cost of jewellery which may not be fully passed due to competitive pressures.

Stocks like Wipro could become weak if the decision to increase public shareholding to 35% takes shape. This will force the company to sell a huge float in the market and that could depress prices. Wipro could also take a hit on the buyback tax imposed.