Most railway and defence counters, which saw a sharp uptick in Saturday's early trade, lost their steam as the special session concluded. Stocks such as Texmaco Rail & Engineering Ltd, Paras Defence and Space Technologies Ltd, Mishra Dhatu Nigam Ltd, IRCON International Ltd, Rail Vikas Nigam Ltd (RVNL) and Bharat Electronic took a sharp beating by falling up to 10 per cent. Domestic benchmarks were open today due to the Union Budget 2025 presentation.
A few market experts said rail and defence stocks slipped as investors anticipated a 'more' capital expenditure (capex) oriented Budget rather than a consumption-driven one.
"We are seeing profit booking in rail and defence stocks as the market anticipated Budget to be more capex-oriented. Overall, the Budget prospects are good but it was consumption-centric. And, these counters have been rising since the last few quarters," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
"This Budget focussed more towards rising disposable income in the hands of middle class, promoting agriculture sector and also labour-intensive manufacturing. Hence, it was expected that defence and railway stocks would see some pain," said G Chokkalingam, Founder & Head of Research at Equinomics Research.
Union finance minister Nirmala Sitharaman, in her eighth Budget presentation, said there would be no tax payable on income of up to Rs 12 lakh -- giving a big relief to middle-class taxpayers. This is only for taxpayers who are registered under the new tax regime. With that being said, the old regime remained unchanged with no tax cuts.
"The middle class provide strengths to the economy. In recognition of their contribution, we have periodically reduced the tax burdens. I am now happy to announce that there will be no income tax up to an income of Rs 12 lakhs," Sitharaman stated.
This overhaul means that individuals earning up to Rs 12 lakh annually won’t pay a single rupee in income tax, a massive leap from previous thresholds. It’s a bold play aimed squarely at easing the financial pressure on India’s middle class, giving them more disposable income to spend, save, or invest.
The finance minister said the new I-T bill would be introduced next week adding that she would update on indirect taxes under the new bill.