L&T & SBI: What Chirag Shah of ICICI Securities says on these 2 stocks ahead of Budget 2024

Chirag Shah, Vice-President (Research) at ICICI Securities, on Tuesday, said the government should not tinker with the capital expenditure (capex) momentum that it has set over the last five years. On the stock-specific front, the market expert picked Larsen & Toubro (L&T) Ltd as the best capex play in the country ahead of the Budget 2024 presentation.

"Capex cycle is a way to transform India into the third-largest economy. In such an environment, L&T is the most preferred bet, given the kind of diversity, execution capability, management bandwidth and balance sheet," Shah told Business Today TV. L&T shares were last seen trading 1.05 per cent higher at Rs 3,689.90 today.

From the public sector undertaking (PSU) banking space, he liked State Bank of India (SBI). "The counter looked undervalued and underrated. Its banking operations are top-notch in the PSU segment. The lender's valuations compared to the mid-caps and its relative peers are quite abysmal. There's a lot of room for earnings catch-up and re-rating," Shah stated. SBI's stock was down 0.18 per cent at Rs 876.80.

Meanwhile, Indian equity benchmarks slipped into the red today after a positive opening, dragged by metals, energy, financial and IT stocks. Broader markets (mid- and small-cap shares) were also down.

14 out of the 16 sector gauges -- compiled by the NSE -- were trading in the red. Sub-indexes Nifty Metal, Nifty Oil & Gas, Nifty Financial Services and Nifty IT were underperforming the NSE platform by falling as much as 1.07 per cent, 1.03 per cent, 0.40 per cent and 0.32 per cent. In contrast, Nifty FMCG and Nifty Realty rose 0.28 per cent and 0.22 per cent, respectively.

On the stock-specific front, ONGC was the top loser in the Nifty pack as the stock cracked 2.51 per cent to trade at Rs 312.75. Shriram Finance, BPCL, LTIMindtree and SBI Life fell up to 2.43 per cent.

In contrast, L&T, Adani Ports, Tata Consumer Products, ITC and UltraTech Cement were the top gainers on Nifty50.

The overall market breadth was weak as 1,833 shares were declining while 1,729 were advancing on BSE.