Union Budget 2024: Cochin Shipyard, IRFC, RVNL, REC among stocks in focus

Ahead of the Union Budget 2024, several public sector stocks are in the spotlight.

Notable names like Cochin Shipyard Ltd, Indian Railway Finance Corporation Ltd (IRFC), Housing & Urban Development Corporation Ltd (HUDCO), Rail Vikas Nigam Ltd (RVNL), and REC Ltd have delivered impressive returns of 200-700% over the past year.

In total, 32 PSU stocks, including those in railways, defence, housing, finance, and capital goods, have doubled investor money during this period.

The budget will be critical for these stocks, with investors keenly observing the government’s allocations and reforms, especially in railway infrastructure, defence spending, and overall public sector investments.

Analysts like Manish Chowdhury from StoxBox highlight the importance of these sectors in the budget, noting that government support could significantly influence stock performance.

Apurva Sheth from SAMCO Securities adds that markets will closely watch for any changes in capital expenditure (capex) outlay.

If the provisional capex figure of Rs 11.11 lakh crore for FY25 remains unchanged or increases, it could positively impact stocks in railways, defence, and other PSU sectors.

Despite these positive trends, some experts, such as Kotak, caution that valuations of many PSU stocks appear high relative to their fundamentals, suggesting that extraordinary improvements in financial performance will be necessary to justify current market caps.