Nifty Realty vs Nifty Energy: Which index should one bet on ahead of Budget 2024?

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Sobha, Brigade Enterprises, DLF, and Macrotech Developers, rallying between 101 percent and 135 percent. Meanwhile, Godrej Properties, Phoenix Mills, Oberoi Realty, Indiabulls Real Estate and Sunteck Realty also jumped between 26 percent and 89 percent each. On the other hand, in the Nifty Energy index, NTPC was the top-performing stock, up over 80 percent in the last one year, followed by Indian Oil, Tata Power, GAIL, and ONGC, up over 50 percent each.

PowerGrid, BPCL, and RIL also added between 22 and 39 percent. However, Adani Green has shed almost 20 percent and Adani Energy Solutions tanked over 61 percent in the last 1 year. Although there would be some buildup of expectations ahead of the vote on account, we think that major policy reforms may get postponed to the regular Budget due in June/July 2024.

This has also been hinted at by the FM in December 2023. The vote on the account could be shorn of any mega announcements or large benefits to people. The government is likely to stay on the fiscal course-correction glide path in the Interim Budget for FY25, shunning populist spending or incentives ahead of the summer general election.

If not any big changes, Sitharaman can certainly consider some streamlining of income tax rules. She may hike standard deductions, and basic exemption limits and extend tax benefits to encourage manufacturing, but these may not have any material impact on the deficit. While sops for two (poor and farmers)out of four castes (as per PM Modi) have already been announced time and again, some sops for the other two (women and youth) could be announced with minimal impact on the deficit.