2 Midcap Stocks To Buy For Long-Term Post The Union Budget 2022-23

Indian benchmark indices have recovered post the budget on hopes that the Union Budget 2022-23 will fuel economic growth. Most experts believe that the budget is growth oriented though the fiscal deficit will remain higher.

Growth oriented budget

"We believe the budget 2022-23 aims to prioritise growth with its thrust on capital spending and generating employment opportunities for wider section of the economy.

The budget also had positive announcements for the telecom industry, Defence and housing sector. As announced by the FM, the PLI scheme in 14 sectors has already received excellent response and has the potential to create 60 lakh new jobs, and an additional production of Rs. 30 lakh crore during the next 5 years.

Required spectrum auctions will be conducted in 2022 to facilitate rollout of 5G mobile services within FY23 by private telecom providers," Mahendra Nahata, MD, HFCL.

Here are a few midcap stocks that we believe are a buy post the Union Budget, 2022-23.

LIC Housing Finance

The Union budget 2022-23 has allocated a solid Rs 480 billion for a housing plan, including affordable housing, in urban and rural areas. The Finance Minister also announced the completion of 80 lakh homes to come up by 2023 under the Pradhan Mantri Awas Yojana

LIC Housing being a leading player in the housing finance business is bound to benefit from the same, given its strong balance sheet and pedigree.

The company recently reported a 6 per cent increase in profit after tax at Rs 767.33 crore for the quarter ended December 2021, aided by higher collections and drop in provisions. Net interest income at LIC Housing grew 14 per cent to Rs 1,455 crore, as against Rs 1,281 crore for the same period in the previous year.

The results were good and the share price of LIC Housing has jumped from levels of Rs 350 recently to Rs 388. However, we continue to remain optimistic of the company's growth prospects following the budget and recommend a buy on the stock of LIC Housing Finance.

BEL

This stock is a good play on the defence sector. The government in the Union Budget 2022-23 has announced 68% of capital for the defence sector to be allocated to the domestic industry in 2022-23. It's also set aside 25% of its budget in defence research and development (R&D) for collaborating with the private industry.

BEL will gain from this, given the government's constant efforts to make in India in the defense sector. The company's R&D and exports are a big positive as well. The stock is available with a dividend yield of nearly 2%.

The stock is also trading at a p/e of just about 10 times which is cheap. We believe the stock of BEL is a good buy for long term investors as defense outlay in every budget will keep increasing.

Disclaimer

Investing in equities is risky and investors must therefore understand the risk. The author and Greynium Information Technologies Pvt Ltd would not be responsible for any losses caused based on the article.

The author and his family do not hold shares BEL or LIC Housing Finance. Investors should exercise caution on account of heightened volatility in the markets currently.