SBI, Canara Bank to PNB: Motilal Oswal recommends 5 budget stocks to buy

Market


Budget stocks to buy: As Union Budget 2023 is fast approaching, stock market experts and captains of commerce fraternity are busy guessing the sectors that will be in focus of the Finance Minister Nirmala Sitharaman as it would be the last full fledged budget of the central government ahead of 2024 Lok Sabha elections. 

According to Chandan Taparia, Derivative & Technical Analyst at Motilal Oswal, infrastructure sector is expected remain in focus of the upcoming budget as government would like to focus on job creation and infrastructure sector has the capacity to solve government’s challenge on both development and job creation front.

Chandan Taparia of Motilal Oswal believes that due to special focus on infrastructure sector, demand for credit line from the banking sector is expected to shoot up in medium to short term. After ease in dollar index, overseas lending has become a costly affair for large corporates and hence they are also expected to come back to Indian banking systems for credit line. So, banking stocks are expected to generate alpha return in all time horizons (short, medium and long). The Motilal Oswal expert said that PSU bank stocks may outperform private bank shares and suggested positional investors to buy 5 PSU bank stocks ahead of budget for stellar returns. Those five PSU bank stocks are State Bank of India (SBI), Canara Bank, Bank of Baroda (BoB), Punjab National Bank (PNB) and City Union Bank.

Why PSU bank stocks in focus

Batting in favour of state-owned banks, Chandan Taparia said, “In upcoming union budget, government is expected to focus on job creation and development and hence infrastructure sector is expected to remain in focus. So, Indian banks are expected to witness surge in demand for credit line from the infra companies. apart from this, overseas lending for large corporates have become costly these day after the continuous decline in dollar index. This is also going to help Indian banks as large corporates who had started preferring to overseas lending are now expected to come back at Indian banks for credit line.”

However, the Motilal Oswal expert said state-run banks are expected to benefit more from these developments as corporates may prefer to PSU banks as their lending rate is comparatively lower than the private banks. So, PSU banks are expected to outperform other sectors and generate alpha return in short, medium and long term.

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On budget 2023 stocks to buy today, Chandan Taparia of Motilal Oswal recommended 5 PSU bank stocks that are SBI, Canara Bank, PNB, BoB and City Union Bank. He advised positional shareholders to buy these bank stocks ahead of budget 2023 presentation as they may become highly bullish after the union budget 2023. However, he strictly advised positional investors to maintain stop loss while taking position in these 5 banking stocks. Taparia said that one who is buying SBI shares should maintain stop loss at 555. He said that stop loss for Canara Bank share would be 295, stop loss for PNB shares would be 53, stop loss for BoB share would be 165 whereas City Union Bank shares will have stop loss at 150 apiece levels.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.


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