New Delhi: In the last month, there has been a rise of up to 77 percent in the shares of government companies of the railway and defence sector. In fact, the stock market expects that Finance Minister Nirmala Sitharaman will continue the agenda of capital expenditure in the upcoming Budget 2024. Also, on the fiscal front, the kind of policy on which the government has been working for the last 10 years will continue. In such a situation, the expectations of both these sectors have increased from the budget.
The special thing is that due to this boom in the stock market before the budget, most of the PSU shares have reached their lifetime high. These stocks are also called Modi stocks. According to Goldman Sachs estimates, if the heavyweight dividend received from RBI is used to increase expenditure, then capital expenditure growth can increase by 21 percent year-on-year.
In the final budget for FY2025 to be presented on July 23, SBI expects its capex to increase from Rs 11.1 lakh crore in the interim budget to Rs 11.8 lakh crore. Due to this a new increase can be seen in Modi shares.
Which stocks have seen a rapid surge?
In the last month, shares of Mazagon Dock Shipbuilders have surged over 77 per cent, followed by multibagger rail stock RVNL which has seen a rise of 51 per cent. Similarly, shares of Cochin Shipyard, HUDCO, RCF, NBCC, BEML and IRCON have seen returns of at least 30 percent in the last month.
Indian Railways’ capex estimated growth
Indian Railways’ capex is estimated to grow at an impressive 18 percent CAGR during FY 2015-24. The total railway capex in the last decade is likely to be 4.1 times that of the previous decade. According to Nuvama estimates, railway capex between FY 2020-24 is expected to be 90 percent higher than FY 2015-19.
Amit Goyal of Pace 360 says in a media report that the capex in the railway sector is expected to increase by 76 percent to Rs 2.55 lakh crore in the next five years. The plans include giving priority to coal and mineral transportation dedicated tracks, improving port connectivity etc. It is expected that the budget will focus on infrastructure development, especially on roads, highways and tunnels. He said that the estimated growth of 11.4 percent in capex from 2021 to 2026 could be to increase the transportation network and connectivity.
What is the main focus of a budget?
Focus on lower-income category and agriculture sector can be seen in the budget. Mihir Vora, Chief Investment Officer, Trust Mutual Fund, says that the market’s focus can be seen on budgetary allocation for key ministries and basic infra, manufacturing, defence, railways, electricity etc. Let us tell you that the stock market is currently trading at record high. If experts are to be believed, the stock market may see a rise even after the budget.
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The share price of Mazagon Dock Shipbilders, RVNL Cochin Shipyard, HUDCO, RCF, NBCC, BEML, and IRCON rallied in the last month. The Sensex made a history by breaching the 80,000 level mark in July 2024. Markets Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
