Ahead of Budget 2022, here's a look at top sectors and stock picks

Finance Minister Nirmala Sitharaman will present the Union Budget 2022 on February 1. Amid the ongoing third wave of the Covid pandemic, the Budget is expected to play a supportive and enabling role.
 
The majority of sectors on Dalal Street managed to deliver a reasonable amount of good return to investors last year. Ahead of the Union Budget 2022, experts are bullish on some sectors and stocks which are expected to outperform going forward.

 
"We expect Infrastructure to get the highest focus in the Budget and the Finance Minister has also hinted at a focus on the infrastructure sector. The corporate sector is doing well, with low-interest rates, tax burden, and PLI schemes, but the Rural and MSME sectors are struggling, so the government might focus there," Sonam Srivastava, Founder at Wright Research told BusinessToday.In.
 
"Also, this being an election year of UP and Punjab, the government might incentivise the agriculture sector. Aid is also expected for hospitality and transport sectors struggling post-pandemic. Sustainable Energy and Electric Vehicles can get tax breaks," she noted.
 
According to Rajesh Agarwal, Head of Research, AUM Capital Market, the pandemic had a damaging impact on global economies. The first wave followed by the second and now Omicron. As the country struggles with Omicron, a positive Budget is expected with a focus on manufacturing, infrastructure, hospitality and healthcare.
 
He noted that private investment and consumption remain a worry. In continuation of the last year’s Budget that was mainly focused on healthcare and the rural economy, this year needs a similar focus as well. While the urban economy has somehow struggled to survive, the rural economy is in the doldrums and that might be the FM’s focus area, he said.

 He added that renewable energy, electric vehicle, could be another area that might find focus. The PM announced in Glasgow about net-zero carbon emissions by 2070. There might be some announcements about this.
 
Also, he further said that hospitality has been the worst-hit sector in the last 2 years of the pandemic, any positive announcements towards the promotion of tourism, financial assistance and/or tax incentives would be a big booster. He is bullish on the hotel industry because of valuations. Many good names are trading at a huge discount to their valuations just because of poor occupancies.

 Ashish Sarangi of Pickright Technologies said, "If we want to keep GDP rising quicker, we can do so with the help of MSME. China has spent the last two decades focusing on this, and they are now the world's largest. Although the government has launched numerous measures in the past, tax breaks on importing machinery, extended credit lines, and reforms around sectors to boost domestic manufacturing."
 
"For the current year, we should keep our expectations reasonable. The government has a bigger challenge this year, they need to propel growth at the same time control the rising Inflation. We are hopeful the Budget will have some good surprises for the banking, infra, health care, real estate, and agricultural sectors which will also indirectly incentivise the auto sector," he added.
 
"Many of the government themes will revolve around the steps to revive the economy by providing productive spending and subsidies, therefore, we expect banking, auto, infra, fertiliser and sugar sector to be more focused in the Union Budget," Ravi Singh-Vice President and Head of Research, ShareIndia told BusinessToday.In.
 
Talking about his top stock picks, he stated that SBI, Exide Industries, Tata Power, Deepak Fertiliser and Balrampur Chini can perform well going forward.
 
Manoj Dalmia, Founder and Director, Proficient Equities Limited highlighted that sectors such as sugar, fertilisers, realty, capital goods, infrastructure, renewable energy are in focus which is evident from the advance-decline ratios of the indexes most of them have been led by small-caps. Focus on capital expenditure is expected in the upcoming Budget. Praj Industries, Bharat Dynamics, Varroc Engineering, ELGI Equipments and Anant Raj are among his top stock picks.
 
Kranthi Bathini, equity strategist at WealthMills Securities is also bullish on infrastructure, renewable energy and the electric vehicle space.