Interim Budget 2024: Top 4 stocks from budget themed portfolio scan that could give 16-20% return

interim budget 2024: top 4 stocks from budget themed portfolio scan that could give 16-20% return

Ahead of the upcoming interim budget and dim markets, the stocks related to defence, automobile, packaging and insurance may gain momentum.

Looking at this week’s Nifty’s performance, it has breached past three week’s low fearing a stop on its bull run.

FIIs have been selling continuously for the past few days which is not considered as a good sign. The futures and options data in the Nifty derivative segment is not bearish which shows some support at the current levels.

It seems that the index is hovering in the range of 21250-22150 for some time now.

Here is a list of 4 stocks for medium to long term:

Mishra Dhatu Nigam Ltd: Buy| LTP Rs 471| Target Rs 525-550| Stop Loss Rs 394| Upside 16%

This GOI-owned (74% stake) company deals in manufacturing superalloys, titanium, special-purpose steel and other special metals.

They are the only manufacturer of titanium alloys in India and cater majorly to sectors like Defence, Space, Atomic Energy etc.

Since DAC (Defence Acquisition Council) has approved AoN costing ₹3.5 trillion which means a 35% YoY growth.

This will lead to a boost in this sector in the coming months. It has the potential to reach 525-550 with a stop loss of 394.

107073938

ICICI Lombard General Insurance Company Ltd: Buy| LTP Rs 1474| Target Rs 1650-1700| Stop Loss Rs 1340| Upside 15%

The 2024 Budget seems to be pivotal for the insurance sector which is hoping to get some tax relief from the current 18% GST and revision of the 80D tax exemption limit.

ICICI Lombard General Insurance Co. is the leading private sector general insurer. Apart from maintaining a strong revenue and net profit on a 3-year CAGR growth, the company is also giving a healthy dividend payout ratio of 29.3%.

The PE ratio of the stock is trading at 39 in comparison with the industry median which is trading at 44. All these factors make the stock a good buy with a potential to go up to 1650-1700 with a stop loss of 1340.

107073976

Steel Strips Wheels Ltd (SSWL): Buy| LTP Rs 271| Target Rs 315-330| Stop Loss Rs 245| Upside 21%

There is a high expectation that the government will provide the 2% grant exclusively for automobile component makers. FAME scheme’s third phase will be unveiled which will ultimately benefit the automotive sector.

SSWL is a leader in designing & supplying automotive wheel rims. Over the last 5 years, the company has delivered good profit growth of 21.1% CAGR.

Their market share has also increased from 0.75% to 1.46%. This makes it a lucrative buy with a target of 315-330 and a stop loss of 245.

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JK Paper: Buy| LTP Rs 430| Target Rs 500-520| Stop Loss Rs 385| Upside 20%

There are some expectations from the upcoming budget to provide relief on import duty, and more benefits via the RoDTEP Scheme and interest equalization schemes.

JK Paper has a 30% market share in the branded copier segment, which makes it a market leader. Over the last 5 years, it has delivered an excellent growth of 36.4% CAGR. It has been giving a healthy dividend payout of 18.9% to its investors.

Another significant data is the increase in the market share from 10.4% to 15.7% over the past 5 years. The stock’s target can be expected to go somewhere between 500-520 with a stop loss of 385.

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(The author is Research Head at thefinberg.com)

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)

For more news like this visit The Economic Times.

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