Investing Strategies for the Upcoming Budget and Q1 Earnings Season

Nischal Maheshwari, CEO of Centrum Broking, shares his insights on the best investment strategies to capitalize on these events.

According to Maheshwari, the market's undervaluation has diminished, and investors should expect the Nifty index to grow in line with earnings, potentially reaching 24,000-24,500 by December 2024. He advises focusing on sectors like manufacturing, defense, and railways, which are expected to continue receiving government support. Specific stocks he recommends include Hindustan Aeronautics (HAL), Bharat Electronics (BEL), and Solar Industries.

The expert also highlights the government's focus on reducing imports and boosting electronic manufacturing services (EMS), making this a promising investment theme for the next 2-3 years. Additionally, he believes the government may address rural stress in the upcoming Budget, which could benefit FMCG companies like Dabur, Emami, and Hindustan Unilever (HUL).

Maheshwari expects the upcoming Q1 earnings season to show a tapering of growth, with earnings growth of 10-12% compared to the previous 15-16%. However, he remains positive on the banking sector, anticipating potential interest rate cuts by the end of the year, and sees some improvement in the FMCG space. On the other hand, he expects the IT sector to continue posting muted earnings due to uncertainty surrounding the US elections.

In terms of specific investment strategies, Maheshwari advises a stock-specific approach, particularly in the PSU space, as he believes there is "a bit of froth" in many PSU stocks. He also recommends keeping an eye on power companies like Triveni Turbine and Tega Industries, which have strong order books and are poised to benefit from the government's focus on manufacturing.

Overall, Maheshwari's insights provide a comprehensive outlook on the investment landscape, highlighting the key sectors and stocks to consider as investors navigate the upcoming Budget and earnings season.