Cement, housing finance stocks to benefit as FM Nirmala Sitharaman pushes MoHUA for full capex utilisation

A key focus of the meeting was the Pradhan Mantri Awas Yojana (Urban) [PMAY(U)] scheme, which aims to provide affordable housing.

The Finance Ministry, in a post on social media platform X (formerly Twitter), highlighted Sitharaman's emphasis on speeding up progress under PMAY(U) to address the housing needs of urban India.

She also stressed the importance of meeting capex targets for urban transport projects, such as Metro Rail and the Regional Rapid Transit System (RRTS).

In the Union Budget 2024, the government kept the allocation for capital expenditure unchanged from the interim budget’s outlay of Rs 11.1 lakh crore, which represents 3.4 percent of GDP.

Several stocks could benefit from the government’s push for affordable housing.

On August 9, the government approved PMAY-U 2.0, allocating Rs 2.3 lakh crore in central assistance to build, purchase, or rent one crore houses for urban poor and middle-class families over five years.

Nomura expects affordable housing finance companies to benefit from this initiative due to their higher exposure to lower-income groups and economically weaker sections (EWS), reports Moneycontrol.

The brokerage is particularly bullish on Aadhar Housing Finance, though companies like LIC Housing Finance, Aavas Financiers, and Home First Finance may also gain.

According to stock market experts, PMAY-U 2.0 could drive cement demand to 179 million tonnes by FY30, up from 147 million tonnes over the previous five years, resulting in a 120 basis points boost in five-year demand CAGR.

Cement companies such as UltraTech Cement, Ambuja Cements, and Shree Cement are expected to benefit from the increased capex for housing and infrastructure projects, which will help them boost production volumes.

The government’s capex target of Rs 11.1 lakh crore for FY25 is expected to benefit companies like L&T, which are involved in urban transformation projects.

Dilip Buildcon, known for its role in urban development, particularly roads and metro systems, is also set to gain from the increased spending on urban infrastructure and transportation, Moneycontrol reported.