Realty and Infrastructure Stocks Surge After FM's CapEx Announcements in Budget 2024

KNR Constructions, PNR Infratech, and other construction and infrastructure-related stocks saw an uptick after Finance Minister Nirmala Sitharaman announced new infrastructure projects for Bihar in her Budget speech. The Budget revealed significant infrastructure developments for Bihar, including new airports, medical facilities, and sports infrastructure. Moreover, Rs. 26,000 crore has been allocated for highways in Bihar to enhance connectivity and regional growth.

J Kumar Infraprojects and Ahluwalia Contracts share price stocks also experienced gains of up to 5% due to the ongoing emphasis on infrastructure.

Andhra Pradesh state-linked stocks rose following the Budget proposal to allocate ₹15,000 crore for the state, with additional funds in the future. Highway and infrastructure developers NCC Ltd and Likhitha Infra each gained more than 4.5%, Power Mech Projects increased over 3.2%, and Deccan Cements rose by over 5%.

J Kumar Infraprojects share price was trading at ₹831.05, up ₹10.90 or 1.33%, Ahluwalia Contracts India at ₹1,446.05, up ₹70.05 or 5.09%, and KNR Constructions at ₹373.20, up ₹9.90 or 2.73%, on the BSE.

Real estate stocks also benefited from the Budget 2024 announcements, which included increased funding under the PM Awaas Yojna and a focus on stamp duty relief for female ownership. Ajmera Realty rose by more than 4%, Prestige Estates by nearly 3%, and GIC Housing Finance climbed by 2%. Check Realty Sector Stocks List

The Finance Minister kept the capital expenditure outlay unchanged at ₹11.11 lakh crore, the same as earmarked in February, and higher than last year’s revised estimate of ₹9.5 lakh crore. Additionally, ₹10 lakh crore was allocated for rental housing. "This allocation is a significant boost to the real estate sector and aligns with the goal of building 3 crore houses across urban and rural areas, leading to infrastructure creation in satellite cities and significant job creation," said Piyush Gupta, Managing Director, Capital Markets & Investment Services, Colliers India.

The government is set to spend 3.4% of the Budget on capital expenditure compared with 3.2% the previous year, nearly double what it spent five years ago. Capex growth has remained in double digits in six of the last seven years. "The unchanged capex target for FY25, as announced in the interim budget in February, is a positive sign, reflecting the government's commitment to balancing infrastructure development with the demands of coalition politics," said Apurva Sheth, Head of Market Perspectives & Research, Samco Securities.

Following these announcements, stocks like Prestige Estates, Sobha, Macrotech Developers (Lodha), Godrej Properties, Oberoi Realty, and Sunteck Realty saw positive momentum.

The budget also introduced significant tax benefits, including revisions in tax slab rates, increased standard deductions, and higher deduction limits for interest on home loans. The reduction in the long-term capital gains tax rate made real estate investments more attractive. Other key reforms included the digitization of land records to enhance transparency, reduce disputes, and streamline transactions.

The government's focus on affordable housing and improvements in digital infrastructure is expected to drive growth in Tier 2 and Tier 3 cities, promoting homeownership and urban development.