Budget 2022 Sector Pick: Analyst bullish on these stocks, sees re-rating in PSU and bank stocks; know why?

A re-rating of public sector stocks, including government banks, could be seen, provided the government is able to launch the initial public offer (IPO) of Life Insurance Corporation in this fiscal, joint managing director of Prabhudas Lilladher Group Dilip Bhatt said in an interview on Zee Business. 

In a conversation with Zee Business Managing Editor Anil Singhvi, Bhatt also said, “Banks and PSUs will have large emphasis as LIC IPO happens till March 2022, re-rating of these stocks is possible as it may get a built-up for both these sectors.” 

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In the banking segment, the private lenders will also be on the radar in the run-up to Budget 2022, besides, investors see major expectations from other sectors such as infrastructure and capital goods, Bhatt pointed out adding that power transmission, basic infra engineering will be key to watch. 

According to the joint MD of Parbhudas Lilladher Group, the moment government steps up its expenses, we are likely to see the reflection of the same in the company’s growth in terms of order books and performance. 

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On the backdrop of Budget 2022, banks, discretionary spending, infrastructure, capital goods, engineering and power-related sectors would be in focus, Bhatt also said, mentioning further that these sectors still have a good scope in terms of lucrative valuations.  

He added, the basic expectation from the Budget 2022 would be an increase in expenditure, that too in the right direction and manner, this could not only help the overall economy to grow but will also add some extra percentage in GDP (Gross Domestic Product). 

In this fiscal, the government’s expenditure has been below expectations, and cash with the Reserve Bank of India had been high, the market analyst said. 

While speaking on LTCG (Long-Term Capital Gains), Bhatt said, “Retailers are earning very well, which could be termed as a good sign, speculation related to LTCG will always be on, removing of LTCG will be a good trigger point for the market, however, this is not reasonable given the current scenario.”