Antique Stock Broking believes that the forthcoming Union Budget 2025 will be non-inflationary in nature and its focus will be on policy continuity in terms of capital spending, fiscal consolidation with limited consumption support. The brokerage expects the government to cajole private capex through 15 per cent YoY growth in capital expenditure (3.1 per cent of GDP in FY26, near the highest levels since FY14) with focus likely on railway and defence.
The building material sector could be a key beneficiary. The brokerage said PM Awas Yojana Gramin is nearing its target of delivering 3 crore houses and aim could be to further deliver 2 crore houses over the next five years, with budgeted outlay of Rs 80000 crore for FY26. Besides, it feels the needs of 1 crore urban poor and middle class families will be addressed under PMAY 2.0. It is seen positive for tiles and pipe players such as Kajaria Ceramics Ltd, Somany Ceramics Ltd, Apollo Pipes Ltd, Prince Pipes and Fittings Ltd, Finolex Industries Ltd, Supreme Industries Ltd, and Astral Ltd.
A scheme to help the deserving sections of the middle class to buy or build their own houses, a scheme under Jal Jeevan Mission to provide tap water with a likely budgeted outlay of Rs 70,000 crore for FY26, promotion of water supply and sewage treatment projects and services for 100 large cities would also be positive for tiles and pipe players.
Antique noted that the capex was substantially lowered in FY25 due to the elections, which will have to recouped in FY26. It sees 9 per cent rise in allocation for railway capex, which would be positive for KEC, Hitachi Energy, Siemens, BEML, BHEL and Titagarh Rail. A likely 8 per cent rise in allocation for metro capex may be positive for BEML, Hitachi Energy and Titagarh while increased allocation for Kavach may benefit Railtel, HBL Power System and Kernex Microsystems.
A likely 8 per cent increase in defence capex may benefit Hindustan Aeronautics Ltd (HAL), Bharat Dynamics Ltd (BDL), Bharat Electronics Ltd (BEL).
In the roads segment, the capex is seen flattish at Rs 2.8 lakh crore, as seen in the last 2 years. It would be positive for IRB Infra, HG Infra, Ashoka Buildcon Ltd, Sadbhav Engineering Ltd, KNR Constructions Ltd and PNC Infratech Ltd.
Antique sees no changes in cigarette tax, which would be positive for ITC Ltd. Increase in allocation to infrastructure, MNREGA and rural spending may benefit Hindustan Unilever (HUL), Dabur India Ltd, Marico Ltd, Godrej Consumer Products Ltd (GCPL), Nestle India, Britannia Industries and VMart Retail.
Further relaxation in labour laws and steps to incentivise formalization of labour force may benefit TeamLease and Quess Corp.
The government is considering a proposal to relax the quantum of adjusted gross revenue, or AGR, dues owed to the exchequer by telecom companies. For Vodafone Idea Ltd, this could mean a potential relief of Rs 52,000 crore, reducing about 75 per cent of its outstanding AGR liability and roughly 25 per cent of its total debt. For Bharti Airtel, the relief is estimated to be around Rs 38,000 crore.
There are hopes that the government may remove some of the PLI restrictions so that more textile companies can come under PLI. Such an announcement would be positive for KPR Mill, Welspun, and Arvind Ltd.
Meanwhile, any imposition of safeguard duty on steel imports, focus on government capex and infrastructure may benefit Tata Steel, JSPL, JSW Steel and SAIL. Increase in import duty on aluminum scrap and decrease of import duty on raw materials like calcined petcoke, caustic soda, and aluminum fluoride would benefit Hindalco, Nalco, and Vedanta.