The FY2018 budget maintains a path of fiscal prudence and envisages higher
infrastructure investments. The government’s focus on rural and housing sector is
expected to be positive for multiple sectors. We view this as a positive event for the
capital markets. The increase in capital expenditure by government is expected to benefit the
companies like L&T, POWERGRID Corporation, KEI Industries, etc. The focus on
affordable housing will be positive for Asian Granito, Dewan Housing and
Mahindra Lifespace. We also see boost in the consumption sector, which is
expected to be positive for Blue Star and Bajaj Electricals. Besides, we also
maintain positive stance on Lupin and Alkem, given their strong fundamentals and
lower valuations.
