Most analysts expect the government to focus on increasing government expenditure on rural economy as well as introduce a measure to kick-start investment cycle in the economy.

The next big trigger for India market is Budget 2018 which will be the last full Budget of the Modi-government ahead of general elections 2019.

Most analysts expect the government to focus on increasing government expenditure on rural economy as well as introduce a measure to kick-start investment cycle in the economy.

“In the upcoming Union Budget, the government is expected to focus on infrastructure and the rural sector. The prime objective is to generate employment in the rural sector by the implementation of various measures,” Abhimanyu Sofat, Vice President, Research, IIFL told Moneycontrol.

The government has been also focusing on agricultural subsidies to increase productivity and yields from cultivation. The central government launched the direct benefit transfer (DBT) for fertilisers in various states in the month of October 2017. This ensures that there is no extra burden on farmers
as they will continue to get fertilisers at a subsidised rate.

Sofat further added that such measures would increase the disposable income in rural India and drive the consumption pattern in India. Some of the stocks that are likely to benefit from the consumption-oriented landscape and likely consumption sector friendly sops in the Budget are Hatsun
Agro, Jyothi Laboratories, and Varun Beverages.

Last month, Finance Minister Arun Jaitley said the government has been creating “instrumentalities” like providing agricultural inputs at lower cost and making cheap credit available to farmers so as to double their income.

Top 10 stocks which are likely to benefit the most from the rural theme

Can Fin Homes (CFHL): Target Rs612
UPL Ltd: BUY| Target Rs 887
Escorts: BUY| Target Rs829
Swaraj Engines Ltd: BUY| Target Rs2384
Godrej Agrovet: Rating BUY| Target – Rs 648
SBI: BUY| Target Rs386
Hatsun Agro Products: BUY
Supreme Industries Ltd: BUY| Target Rs1450
Varun Beverages: BUY| Target 10-12% upside
Action Construction Equipment (ACE): BUY| Target Rs165
Mahindra CIE: BUY| Target Rs 297

source: moneycontrol.com