Budget 2024: Maruti Suzuki, Power Grid top Nifty-50 gainers; Grasim, L&T among top losers on the budget day

Budget 2024: Maruti Suzuki India Ltd was the top gainer amongst Nifty-50 stocks on Thursday as it gained more than 4%, on the day finance minister. Nirmala Sitharaman presented the interim budget.  Power Grid , Cipla Ltd , SBI Life and Eicher Motors were the other prominent gainers with gains of 2-3% on the budget day.

For Maruti Suzuki while a strong growth in earnings reported by the company during the December quarter, despite weak demand also led to the gains.  Also analysts at Jefferies had pointed that valuations Maruti share price trades at are positive. As per Jefferies Maruti was trading at valuation of 22 times FY25 estimated price to earning compared to last 10Years average of 24 times. Analysts said that the budget indicating sustenance of strong domestic also bodes well for Maruti sales. Further the budget's emphasis on supporting Electric Vehicle manufacturing. Maruti plans to launch 10 new models till 2030 across ICEs and EVs

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Meanwhile Eicher Motors reporting 31% y-o-y rise in motorcycle models with engine capacity exceeding 350cc also impressed. 

Cipla remains key beneficiary of rising growth in the US business as domestic growth remains strong. Power grid will benefit from strong power demand. Rising energy infrastructure as focus was emphasized in interim Budget also bodes well. The Government has special focus on the energy segment.

Meanwhile Grasim Industries, Larsen & Toubro Ltd, UltraTech Cement, Dr Reddy's Laboratories were among the largest losers in the nifty 50 stocks, seeing their share prices decline more than 2%.

The sentiments towards infrastructure stocks remained mixed. Though the finance minister increased the outlay towards the infrastructure sector by 11.1% to ₹11.11 Lakh crore, analysts say that the expectations were building for a higher increase and hence there was some disappointment.  Not surprising L&T, the infrastructure major and Cement manufacturers as Grasim, and UltraTech and even JSW steel with share price declining 1.9% year-on-year were among top 5 losers.

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For L&T the weak margin profile reported by the company during past few quarters also has dampened investor sentiments even though rising order inflows bodes well for future outlook.

Meanwhile for steel and Cement, the rising demand however remain positive for outlook.  

The focus on achieving housing targets, coupled with the PM Jal Jeevan Mission, provides a significant avenue for steel products, said, Aditya Jajodia, Chairman and Managing Director, Jai Balaji Industries.

The continued expansion of rural housing along with the proposal to develop three economic railway corridors under the PM Gati Shakti Yojana are other significant moves that will spur steel demand, create jobs, and improve connectivity & logistics, said TV Narendran CEO&MD Tata Steel.

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