Budget is round the corner and the Indian economy is grappling with slower economic growth, fiscal deficit exceeding the target and falling consumption. Finance Minister Nirmala Sitharaman shall be tabling her eight Union Budget this Saturday, that is, February 1. Market participants are expecting the FM to prioritise long-term growth with a focus on capex.
However, some experts believe the Sitharaman may disappoint Dalal Street amid trying to balance on the tightrope of economic push and social welfare schemes. On the other hand, market participants have suggested some stocks who may reap the benefits of capex push post budget.
Amnish Aggarwal, Director - Institutional Research, PL Capital - Prabhudas Lilladher said that capex story shall support the counters from capital goods, EMS, infrastructure, ports, data centres, railways and defence sector. He has picked Praj Industries, Bharat Electronics, BEML, Apar Industries, GE T&D, Siemens and ABB India as his picks for this budget.
There are optimistic expectations regarding the prioritization of infrastructure spending, which is anticipated to significantly benefit the cement segment. Government allocation towards infrastructure projects is expected to increase, with capex anticipated to rise by about 10-12 per cent from Rs. 11.11 lakh crores in the FY25 budget, said Manish Chowdhury, Head of Research, StoxBox.
"The government is likely to increase the budget allocation for the Ministry of Road Transport and Highways (MoRTH) by 5- 6 per cent. A significant focus will also be placed on rural road development. From a budget perspective, the outlook for the infrastructure sector remains positive, with L&T, KNR Construction, Ultratech and Ambuja Cements identified as our top picks," he said.
Ahead of the 2025 Budget, top defence stocks to consider include Hindustan Aeronautics (HAL) and Bharat Electronics (BEL), said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking. Both companies are well-positioned to benefit from rising government spending and initiatives aimed at enhancing self-reliance in India's defence sector, he said.
Singh favours HAL for its strong growth potential driven by increasing defence contracts and a robust order book, while BEL stands out due to its leadership in defence electronics and consistent performance, supported by strong research and development capabilities.
Ajay Garg, CEO at SMC Global Securities said that the government is expected to continue with the policy reform and infrastructure spending to drive economic growth and help achieve the GDP target of $5 trillion by 2028-29. He has picked Larsen & Toubro (L&T), GR Infraprojects and KEC International from the capex theme.