Top 5 stocks to buy before the 2024 Budget

In this article, we will talk about the Top 5 stocks to buy before the 2024 budget“. This time, the government has set the budget at 6.21 lakh crore, which is an increase of 4.72% compared to last year, 2023. Its focus will be particularly on the modernization of military infrastructure and the promotion of domestic manufacturing. This time, people have high expectations from the Modi government, such as tax benefits for health insurance under the new tax regime, relaxed payment norms for MSMEs, and significant incentives for the agri-tech sector. In this article, we will discuss two major sectors in which the government has allocated a large amount: the defense and railway sectors. The Ministry of Defense sector was allocated the highest amount of 6.2 lakh crores, followed by the road transport and highways sector with 2.78 lakh crores, and the railway sector with 2.55 lakh crores. As everyone knows, the budget was released on 1st February, and since then, the stocks in these three sectors have experienced a significant increase. Today, we will discuss some stocks in these sectors and analyze them. “5 Best stocks to buy before Budget 2024” We will explore the benefits of investing in these stocks before Budget 2024

Table of Contents

Top 5 stocks to Focus on before the Budget 2024.

1-IRCON: Infrastructure/Construction (specifically railways)
2-RVNL (Rail Vikas Nigam Limited): Infrastructure/Construction (specifically railways)
3-RattanIndia: Infrastructure and Renewable Energy
4-Titagarh Wagons: Manufacturing (specifically railways and defense)
5- GRSE (Garden Reach Shipbuilders & Engineers Limited): Defense and Shipbuilding

1 IRCON

IRCON International Limited, which we all know as Indian Railway Construction Company Limited, is a public sector undertaking under the Ministry of Railways, India. Talking about its business model, it mainly undertakes railway construction projects such as laying tracks, bridges, culverts, and stations, building structures, and also constructs highways and roads. IRCON also has an international presence and has completed projects in many countries like Malaysia, Nepal, the UK, and Algeria etc. IRCON collaborates with other firms through joint ventures to leverage combined expertise and resources for large-scale infrastructure projects

Financial performance: For the fiscal year ending March 31, 2023, Ircon International Limited demonstrated a strong financial performance. The company’s annual sales increased to INR 103,679.3 million from INR 73,796.7 million in the previous year. Revenue for the year reached INR 107,498.9 million, up from INR 75,857.1 million in 2022. Net income rose to INR 7,652.3 million compared to INR 5,923.4 million in the prior year. Basic and diluted earnings per share increased to INR 8.14, reflecting significant growth from INR 6.3 in the previous fiscal year. For the fourth quarter of 2023, sales were INR 37,806.6 million, and revenue was INR 39,536.7 million, both higher than the same period in 2022

Now let us know which projects have been given to this IRCON company

Designs drawing and construction of external development work and external service for NIT Mizoram Rs 3296.70 million.
Railway electrification work for Katni Singrauli 2583.30 million, Mathura Kasganj Kalyanpur- Rs 305 910 million.
Civil and Railway allied work including S&T, mechanical and new block station and associated work for the proposed 3.0 MTPA integrated steel plant and Nagarnar. Chattisgarh by NMDC; package No.I, II & IV – Rs. 4464.00 Million.
Construction of Embankment, Track, All civil works, major and minor bridges (except Rupsha) & culverts and implementation of EMP of Khulna – Mongla Port Rail Line; Package No. WD1 in Bangladesh – Rs. 9713.00 Million.
Six-Laning of Davanagere-Haveri from (Km. 260+000 to Km. 338+923)of NH-48 in Karnataka to be executed on Hybrid Annuity Project on DBOT Annuity Under NHDP Phase-V – Rs. 10950.00 Million.

Why Invest in IRCON INTERNATIONAL before the Budget 2024;

Ircon has a very strong financial profile. It has good revenue and growing EBITDA. The balance sheet is also very strong. The valuation of the company is also very attractive. Ircon has a large order book of over ₹27.208 crore as of FY 2024. The IRCON Company has recently won several major infrastructure projects, including railway electrification, highway construction, and a tunnel project in Mizoram worth over ₹6.3 billion. These orders show that the company will generate very good revenue in the coming times. The company also offers a good dividend of around 4.5%, which is very attractive to investors, making it a good investment option for investors seeking both capital appreciation and dividend income. Overall, we can say that IRCON is a strong company with a strong financial position. Its cheap valuation, large order book, and favorable government policies make it an attractive investment option ahead of Budget 2024

2.RVNL (Rail Vikas Nigam Limited;

Rail Vikas Nigam Limited (RVNL) is a government-owned Navratna PSU in India that executes railway projects and provides consultancy services. RVNL’s business model focuses on efficient project execution and collaboration with the Ministry of Railways to implement crucial railway projects. RVNL’s clients include various central and state government ministries, departments, and public sector undertakings

Significant increase in revenue and profit for March 2024 quarter.

Upcoming project of RVNL

The government focuses on infrastructure development,with increased capex spending on railways and roads,and bodies well for RVNL’s business prospects. RVNL secured several significant projects , including eternal projects in Mizoram and partnership with international and cities life satveer middle East and Africa LLC.

The company is working on doubling the track between Madurai and Tuticorin, as well as between Vanchi Maniyachchi and Nagercoil. This includes construction of platforms, earthwork, and signal/telecommunication work at stations along these routes.
Additionally, RVNL is undertaking a new line project between Rishikesh and Karnaprayag. The company is also involved in bridge works, electrification, and gauge conversion projects across India.
Some key upcoming RVNL tenders include supply of welding portions and execution of welding for the Madurai-Tuticorin doubling project, construction of platforms and other works at Nagercoil Junction, and signal/telecommunication work for the Vanchi Maniyachchi-Nagercoil doubling.

Why Invest in RVNL

RVNL (Rail Vikas Nigam Limited) has a strong financial outlook and promising future prospects, making it an attractive investment opportunity:
RVNL has reported robust financial performance, with a 5-year revenue growth rate of 21.7% and 5-year EPS growth of 18.7%. Its profitability metrics like net profit margin, RoA, RoE, and RoCE are all healthy and trending upwards, indicating efficient utilization of assets and capital to generate profits.
The company has a massive order book worth over ₹85,000 crore as of March 2024, providing strong revenue visibility for the next few years. RVNL aims to maintain an order book of ₹75,000-100,000 crore to sustain its growth trajectory.
Analysts forecast RVNL’s earnings and revenue to grow at 3.4% and 10.1% per annum respectively in the coming years. Its return on equity is expected to be 16.7% in the next 3 years.
The government’s focus on upgrading India’s railway infrastructure bodes well for RVNL, as it is a key player in executing major rail projects. This, combined with the company’s robust financials and growth plans, makes RVNL an attractive long-term investment opportunity.

3. RATTAN INDIA

RattanIndia Enterprises follows a diversified, technology-focused business model centered around scaling new-age businesses through a subsidiary structure, industry expertise, and inorganic growth strategies.invests in new age businesses that focus on technology, including e-commerce, electric vehicles, fintech, and drones.

Why Invest in Rattan India

Financial Performance:
RattanIndia Power reported strong financial results in the recent fiscal year, with a consolidated net profit of Rs 8,896.75 crore compared to a loss in the previous year.
The company has improved its profitability, with a Return on Equity (ROE) of 203.87% in FY2024, significantly higher than the 5-year average of -141.06%.
RattanIndia Power has a healthy current ratio of 1.72 and a low debt-to-equity ratio of 0.688, indicating a strong financial position.
Future Prospects:
The company is focused on expanding its power generation capacity, both in thermal and renewable energy.
RattanIndia Power is exploring growth opportunities and leveraging technological advancements to strengthen its position in the power sector.
The strong cash flows from the company’s thermal power business are expected to provide the financial flexibility to pursue renewable energy projects.
Caution:
Some search results suggest that RattanIndia Power was previously considered a “pump and dump” stock with poor fundamentals, which led to significant volatility in the past.
Investors should carefully analyze the company’s financial statements, growth plans, and industry dynamics before making an investment decision.
In summary, the search results indicate that RattanIndia Power has delivered strong financial performance in the recent fiscal year and is focused on growth opportunities in the power sector, including renewable energy. However, investors should exercise caution and conduct thorough due diligence before investing, given the company’s past history of volatility

4. TITAGHAR WAGONS

Titagarh Rail Systems is a leading Indian manufacturer of a wide range of rolling stock and railway equipment, with a growing global presence and a focus on supporting India’s railway infrastructure development

Financial Performance:
Titagarh reported strong financial results for the fiscal year ending March 2023:
Consolidated net profit of Rs. 249.32 crore, compared to a loss of Rs. 68.55 crore in the previous fiscal year.
Total consolidated income increased to Rs. 1,96,662.75 crore from Rs. 1,54,549.87 crore in the prior year.
The company reported improved profitability across its key business segments – Freight Rolling Stock, Passenger Rolling Stock, and Shipbuilding, Bridges and Defence.
Key financial ratios:
Return on Equity (ROE) of 18.1% in FY2023, up from 12.4% over the last 3 years.
Debt-to-Equity ratio of 0.688, indicating a low proportion of debt in the capital structure.
Operating margin of 12.8% in FY2023.
Future Prospects:
Titagarh is focused on expanding its power generation capacity, both in thermal and renewable energy.
The company is exploring growth opportunities and leveraging technological advancements to strengthen its position in the rail systems and engineering sectors.
Investors can analyze the company’s annual reports and quarterly results to further evaluate its growth prospects.

Titagarh Rail Systems Limited has delivered strong financial performance in the recent fiscal year, with improved profitability, healthy financial ratios, and a focus on growth opportunities in the rail systems and engineering sectors.

5. GRSE

GRSE’s business model is centered around its core competency in shipbuilding, complemented by diversification into ship repair, engineering, and emerging market segments. The company’s focus on indigenization, technological advancements, and strategic partnerships positions it as a key player in India’s shipbuilding industry.

GRSE has delivered strong financial performance in the recent fiscal year, with improved profitability, healthy financial ratios, and a robust order book. The company’s focus on technological advancements, innovation, and strategic growth initiatives positions it well for future success in the shipbuilding and engineering sectors.

GRSE is a well-established and financially sound company in the shipbuilding industry, with a strong order book, growth prospects, and a commitment to technological advancements. These factors make GRSE an attractive investment option for those seeking exposure to the Indian defense and engineering sectors.

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Disclaimer; The information provided in this note is for general educational purposes only and should not be considered as a recommendation to buy or sell any stocks. Investors should conduct their own research and consult with financial advisors before making any investment decisions