Analysts anticipate infrastructure-led companies to see the benefits of the budget proposals in the second half of the next financial year and drive the re-rating of these companies. The government proposed to raise capital expenditure by 33% for FY24 to ₹10 lakh crore.
Capital goods and cement companies such as Larsen & Toubro,
, and will benefit the most from the massive outlay of government capex plans, said Hemang Jani, head of equity strategy, broking and distribution at .
“Private capex cycle has been strong in the past two years, and the government proposals towards infrastructure would keep the growth momentum to continue going forward,” said Jani. “At a broad level across the capital goods, cement, construction and infrastructure sectors, capacity utilisation levels stand around 70-80%, driving the need for expansion in capacities and therefore enhanced expenditure.”
“The government outlay augurs well for the order book over the next three to four years which was not visible about a couple of years ago. The cement sector looks attractive and will be a clear winner in the times ahead,” said Siddhart Bhamre, head of research at
Broking.
The budget has allocated the the highest-ever capital expenditure for the railways at ₹2.4 lakh crore for FY24. The Centre has identified 100 critical transport infrastructure projects, for last and first-mile connectivity for ports, coal, steel, fertiliser, and foodgrains sectors, and earmarked ₹75,000 crore.
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