Top Indian stocks to buy as Modi-government readies Budget 2024

Following the 2024 general elections, Indian equity markets experienced a notable rally, driven by investor optimism about the newly elected government's commitment to economic reforms and stability. 

Despite global headwinds, Indian markets have performed well, with the BSE Sensex surging 25% in FY24. 

Key areas of focus of India's Budget

According to Gaurav Dua, head of capital marketing strategy, ShareKhan, the government will try to spend more on the rural sector and provide some kind of relief to the middle class in terms of lower tax slabs. 

Dua anticipated tight control on the fiscal side and said the deficit figure which stood at 5.7% in FY25 will be 5.1% and next year, in 2025-26, the government will control the fiscal deficit number to 4.5%. 

Beware of overvaluation, correction

Sharing her insights with Invezz on the outlook for the budget, Sugandha Sachdeva, founder, SS WealthStreet, said:

However, Sachdeva advised caution due to potential overvaluation and the likelihood of corrective moves if budget expectations are not met.

"Even as the markets are in a structural uptrend, a healthy time-wise and price-wise correction over the next two months is anticipated, which could lead to some consolidation and present buying opportunities," she said.

Potential negative triggers

Sachdeva said any unfavorable changes in capital gains tax might not be well-received by market participants.

Besides, there is a lot of news flow around changes in the derivatives segment which may have a short-term negative impact on the market, she said.

"Budget 2024 is poised to address the multifaceted needs of the economy while balancing populist measures and fiscal responsibility. Investors should stay informed and cautious, ready to capitalize on opportunities arising from the Budget’s announcements while being mindful of potential market corrections," she said.

Which stocks to buy?

Following are Sachdeva's picks that may witness short-term dips yet look to traverse on the higher trajectory from a medium-term perspective:

• SBI Cards: Buy between Rs 680-685, target Rs 840, stop loss at Rs 595
• Oberoi Realty: Buy between Rs 1,570-1,580, target Rs 2,050, stop loss at Rs 1,280
• RITES: Buy between Rs 650-660, target Rs 880, stop loss at Rs 520
• KPIT Tech: Buy between Rs 1,690-1,695, target Rs 2,080, stop loss at Rs 1,500
• HBL Power: Buy between Rs 540-550, target Rs 765, stop loss at Rs 430.