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Budget Stocks: Make these stocks before the budget arrives, ride on the announcements and run up.

Budget Stocks: Union Finance Minister Nirmala Sitharaman is preparing to present the budget for the eighth time. She will present the budget of next financial year 2026 on 1 February 2025. This budget is coming at a time when there are many uncertainties around the world including India and foreign investors are rapidly withdrawing money from the domestic market. Market’s eyes are currently on the Finance Minister’s announcement of what gifts she gives. Know which shares of which sector will benefit from the announcement of Finance Minister?

Capex and Infrastructure: L&T, Ultratech Cement

The pace of order flow has been sluggish since last year’s Lok Sabha elections, which has shocked the growth of Infra sector. Capux fell 12.3 per cent between April and November in FY 2024. Apart from this, the ratio of capex and revenue also fell from 28 per cent to 23 per cent in FY 2024, indicating the need to deal with rapid work in this quarter. Jefferies says that L&T’s strong infra orders are indicating good growth. Talking about UltraTech, its capex can increase by 10-12 percent due to initiatives like National Infra Pipeline (NIP), Prime Minister’s speed power and Bharatmala Project. The sector will also get support from the proposed deduction of GST on cement.

Road and Construction: KNR Construction, Ashoka Buildcon

The budget is expected to increase the allocation of Road Transport and Highways (MORTH) by 5-6 percent. If this happens, private investment in the highway project can also increase, especially under the build-operate-transfer (BOT) model. Apart from this, there will also be a focus on the development of roads in the villages and the funding of the Pradhan Mantri Gram Sadak Yojana may increase. For FY 2026, the ministry aims to increase the length of National Highways by 12 thousand -13 thousand km. This goal of the ministry will benefit KNR Construction and Ashoka Buildcon.

Power sectak is currently struggling with the sluggish demand for short term but the government’s focus remains on it. In the last budget, the government had allotted a budget of 16 percent more ₹ 20502 crore to the Power Ministry and this time a similar hope is being expected. Siemens can benefit from an increase in transmission pipeline and can increase the revenue from the speed of the rocket. Talking about thermax, its focus is clean energy and industrial power. It is getting support from the rising investment on Infra and the increasing focus on Sustainebel Energy. Jefferies estimates that Infra and Industrial Capes may increase at a compound rate of 13 per cent annually in FY 2024-27, increased by 6 per cent between FY 2011 to FY 2020.

The Defense Ministry has called 2025 the year of reform this year. The emphasis of the ministry is on modernization and indigenization. In the budget, more focus on capital experts will benefit the defense manufacturing sector companies. Jefferies estimates that the expenditure on defense between FY 2024 to FY 2030 may increase at a speed of 7-8 per cent annually, making a chance of $ 100-120 billion for companies in domestic market in 5-6 years in 5-6 years. .

The order of HAL rose by 50-52 per cent in FY 2024 to nearly 40 thousand crores and now the company aims to take it to 60 thousand crores. This is the top son in the defense sector due to a joint venture with veteran global companies like GE. Due to the emphasis on Swadeshi, Jefferies estimates that its EPS will grow at a compound rate of 20 per cent annually in five years.

Railways: RVNL, BEML, IRFC

The budget is expected to get 15-18 percent more money this time. The government’s focus is on increasing capacity, including investment in Vande India trains, increasing rolling stock and modernizing infrastructure. According to the earlier report of Moneycontrol, the government can allocate Rs 2.9-3 lakh crore as gross budgetary support (GBS) for Indian Railways in 2025-26. The work is underway to upgrade 40 thousand bogies and bring 10 thousand km under the armor ATCS system. The use of AI in track monitoring and ticketing will suggest in efficiency and ‘Make in India’ will create new opportunities.

Real Estate: Oberoi Realty, PNB Housing, Aavas Financiers

The real estate sector is struggling with the rising cost of raw materials and the old definition of affordable housing. Incentives such as changes in the standards of affordable housing and tax exemption, subsidy and industry status can provide very important relief to developers. Organizing the rules and simplifying approval process can promote foreign investment in commercial real estate sector. In view of policy support such as expensive land and increasing cost of materials, the rules of affordabel housing changes, then stocks like PNB Housing and Housing Financers will benefit. Apart from this, the Credit-Linked Subsidy Scheme (CLSS) is re-brought under the Pradhan Mantri Awas Yojana and the real estate sector will get good support.

Consumption: Hul, ITC, Dabur, Marico, Emami

Talking about consumption, keep an eye on ITC, Dabur Marico and Mami. The budget is expected to provide big relief like standard deduction and increase in tax execution limit so that more disposal income is left in the hands of common people. Even if excise duty is cut on oil, the pressure of inflation will be reduced and the common people will save more money for expenses.

Consumption stocks such as HUL have come down by about 22 per cent and ITC nearly 16 per cent due to consumption stocks in cities. Despite the challenges like inflation and high input cost, if the budget makes such announcements that increase consumption, then FMCG stocks may increase. CLSA believes the same.

Green energy: waaree energy, inox wind, ntpc green; Solar Energy: Adani Solar, Borosil Renewables, Sterling & Wilson

The government has a lot of emphasis on renewable energy and due to this, in 2024 last year, the renewable capacity grew by about 15 GW. This increase was doubled on an annual basis. The government aims to renewable energy of 500 GW by the year 2030 and for this, PM-Kusum and Green Hydrogen programs are running. Currently, non-fossil fuel capacity is 214 GW.

The solar sector is also moving fast and the rooftop solar captici is being emphasized through initiatives like PM Surya Ghar Yojana. The government is working on increasing the National Solar Portal to improve the Project Executive Efficiency and is also working on the battery energy storage system to improve grid management. Now a new rule is going to be implemented from June 2026, under which solar cells can only be taken from companies included in the approved list of models and manufacturers and this will benefit the sector a lot.

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