Budget And The Key Themes In Last Five Years | NDTV Profit
Power sector, railways, PLI schemes, defence and more...
What does #Budget2024 mean for different sectors?
For the latest news and updates, visit: http://ndtvprofit.com
What does #Budget2024 mean for different sectors?
For the latest news and updates, visit: http://ndtvprofit.com
Category
📺
TVTranscript
00:00 The union budget is an opportunity for the government to lay down the roadmap for the coming year.
00:05 And usually the policies and measures announced have far-reaching implications for companies
00:11 and by extension for you, the investor. You may not see big bang announcements this time around.
00:18 And so it's a great opportunity to look back at the last five years at the key themes that have
00:24 led to wealth creation for investors and to potentially gauge whether these themes could
00:30 hold for the next five years. The first theme we're looking at is power. Power sector is directly
00:36 linked to the growth of the country. Now this is a fuel which gives impetus to the country. Now if
00:41 you see total power generation has increased at 18 percent from 2018 to 2023 and this has
00:47 translated into stock performance of the company. So you have NTPC, Power Grid, JSW which has given
00:53 returns over 3x. Now along with power the biggest segment that is buzzing is renewables which is a
00:59 global traction discussed in global summit like G20 summit where international targets are being
01:04 set up. Indian government has also set up a target where they want to increase the renewables by 500
01:10 gigawatt by 2030. Now companies have also done well at share price level where you see Worry
01:16 Renewables has given returns to his investors almost over 140x followed by KPI Green Energy of
01:22 50x and Gensol Engineering which has given returns to his investors at 48x. And that 500 gigawatts of
01:30 renewable capacity is what a lot of companies are betting on and why investors feel that this is a
01:37 structural story that's not going anywhere. The other structural story that everyone's focused on
01:43 is railways and that's because a lot of money is being invested by the government in this space.
01:50 But specifically what are the key themes that are likely to pan out going forward as well?
01:56 Take a look. India's focus remains on expanding its railway network and improving its trains
02:01 condition. From 2014 to 2023 total railway track in kilometers stands at 25,800. Major projects
02:09 taken to improve the railway condition includes Vande Bharat trains and Amrit Bharat stations and
02:13 trains. Now because of this all the railway stocks were on a fast track. In the last one year most of
02:19 the railway stocks have been multi-baggers which have given returns ranging from two times to five
02:24 to six times. And stocks like Titagar and Jupiter wagons have given 14 to 15 times returns in the
02:30 past five years. If we talk about the outlook India is set to purchase one lakh crore worth of trains
02:37 and sets an investment of 12 lakh crores by 2030 in railways. The question is how much will be
02:44 spent in FY25 and we'll know about that soon enough. Let's also talk about roadways and
02:51 highways because that's another area that the government is spending big on. Indian roadways
02:56 have flourished under the guidance of Mr. Nitin Gadkari and India has 66.71 lakh kilometers of
03:03 road network as of 2023 which is the second largest road network in the world. If we talk about
03:09 national highways, national highway network has increased by 60 percent as compared to 2014. If
03:15 we talk about highway construction in the past five years it ranges from 10,200 kilometers to
03:20 13,300 kilometers. Major projects taken up for the highway projects are Bharat Mala Prayojana
03:27 and high speed corridors and because of this major infrastructure companies have benefited.
03:32 We have companies like HG Infra, Engineering and IRB Infra which have grown up to two to three times
03:38 in the past five years and we have Engineers India which has grown two times in the past one year.
03:43 Now the three themes that we've discussed so far are longer term themes, multi-year themes.
03:50 A more recent theme has been the PLI schemes that has drawn attention back to manufacturing
03:56 here in India. Increased need for localization and to reduce the imports were some of the key
04:02 objectives of the existence of PLI schemes. So far PLI schemes have witnessed an investment of
04:07 about one lakh crore which have resulted in sales of about eight lakh crore. Some of the biggest
04:13 contributors of the PLI schemes are sectors like electronic manufacturing companies, the pharma
04:18 pack, the telecom companies and IT hardware companies. If you are to dissect the stock
04:24 performance of it, the IT hardware stocks includes the Sirma SGS technology and ITI limited which
04:30 have surged more than 130 to 200 percent over this one to three year period. Whereas in the electronic
04:36 manufacturing companies we have Shivalik Biometal Controls and Dixon Technologies as some of the
04:42 notable names. In the telecom I want to bring your focus to Tejas Network and HFCL which have surged
04:49 more than 200 percent in the last three years. Now if there's one sector that has benefited the most
04:55 from India's drive towards self-sufficiency it is defense. But the question is which stocks have
05:02 benefited the most? Overall defense has seen an increasing allocation in the budget over the last
05:08 five years with about 13 percent growth in the last one year. Now in the same period the defense
05:15 budget as a percentage of union government expenditure has remained in the 13 to 15 percent
05:20 range. So if we do a last year's roundup the focus continues to remain in the positive
05:26 indigenization with the fifth PIL included items to be procured from the indigenous sources.
05:33 Now some of the notable stocks like Hindustan Aeronautics and Bharat Electronics have surged
05:39 more than seven times in the last five years. Meanwhile in the last one year including the
05:45 stocks like Mazgaon Dog, BML and Medani have seen about more than 2x return. Now remember those are
05:54 just a few of the key themes that have played out and will likely play out going forward.
06:00 For all the live coverage of the budget do stay tuned to NDTV Profit.