Budget 2025: All eyes are focus on Finance Nirmala Sitharaman who is going to present her eighth Budget speech on February 1, 2025. Due to this, Indian stock market has carried a special trading session on Saturday. Amidst the Budget enthusiasm, brokerage Mehta Equities believe auto, financial, infra and defence are among sectors to be in limelight during the Budget speech. That being said, here are a list of stocks to watch during the Budget announcement.
AUTO Stocks:
Mehta Equities picks auto stocks namely Maruti Suzuki, Ashok Leyland and M&M.
The brokerage highlighted that the auto industry is awaiting with high expectations for the Electric Vehicle (EV) industry. The sector is hoping for some level of rate rationalisation to reduce interpretative issues and litigations. Electric vehicle (EV) ecosystem urgently needs scalable infrastructure. This includes widespread deployment of EV charging stations, battery-swapping hubs and integration with renewable energy sources.
Also, the auto sector is wishing for relaxations, including a uniform GST of 18% on all auto parts, from the central government in the upcoming Union Budget as this help remove an inverted duty structure that restricts working capital.
Infra Stocks:
The brokerage picked Larsen & Toubro in the infra boost during Budget 2025.
Mehta Equities said, Public investments and enhanced infrastructure investment need to be stepped up as the burden for economic growth in FY25 would fall again on the government. Along with fund allocations, the government should also ensure sustained monitoring.
Further, the brokerage added that enhance opportunities for private investment in infrastructure that will assist all stakeholders for more private investment in infrastructure, including railways, roads, urban infrastructure, and power. The industry anticipates heightened government emphasis on safety and timely infrastructure upgrades in the country.
Financial Stocks:
The brokerage suggested SBI and ICICI Bank as its top picks. For Banks, focus would be on PSU Bank Privatization and Digitalization Perks, it said.
It added, "Major expectation includes a higher recapitalization amount for PSU Banks as they could rely on market borrowings. But market participants would look for a roadmap to reduce the government's stake in public-sector banks. The Budget should include fast-tracking the public sector bank (PSB) privatisation programme. This would help improve the efficiency of small and medium PSU Banks."
Real Estate Stocks:
Oberoi Realty, DLF, and Godrej Properties are top picks of Mehta Equities. The brokerage believes that the government could provide a further boost to the affordable housing segment by increasing the tax exemption limit for home loans.
Additionally, Mehta Equities added that growth momentum needs to be maintained in the face of difficult macroeconomic conditions marked by high inflation and rising interest rates. At the moment, many global investors are on a wait-and-watch mode as recessionary pressures persist.
Defence Stocks:
Under this sector, the government has selected Hindustan Aeronautics (HAL), Bharat Electronics (BEL) and Data Patterns.
"Upward trend continues in Defence Capital Expenditure promoting 'Aatmanirbharta' (By 2030, the Indian defence budget is likely to grow to $200 billion). India's defence exports surged to 16,000 crore in 2023-24, with a target of Rs35,000 crore by 2025," Mehta Equities said,
Furthermore, the brokerage highlifhted that India sources a staggering 60% of its weapon systems from international markets. It's time for India to not only address its fiscal woes but also assert its security, sovereignty, and economic interests. (The good news is that the Indian government is trying to strengthen the nation's defence prowess by reducing dependence on imports. Large and sustainable opportunities for domestic players also exist particularly in engineering services and component sourcing, on the backdrop of the goal of reaching 50,000 crore in exports by 2029-2030). India shall be the leading global defence manufacturing hub sooner than lat
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