Fund Managers Expect Big Announcements in Budget 2025
With the Union Budget 2025 just around the corner, fund managers are closely eyeing announcements in sectors that could significantly shape market performance and investment flows. The government is expected to continue its focus on critical areas such as infrastructure, steel, manufacturing, consumption, and the automobile industry. Analysts predict that substantial allocations and policy decisions could provide further growth opportunities across these segments.
Infrastructure
Kunal Shah, Senior Research Analyst at Carnelian Asset Management & Advisors, expects the government to maintain a robust capital expenditure budget exceeding ₹11 lakh crore. This move is anticipated to benefit key infrastructure sectors such as railways, roads, and cement. Shah highlights the importance of how the Finance Minister balances fiscal discipline with the need for socialist-driven priorities. Investors are looking towards infrastructure stalwarts like L&T, KEC International, and HG Infra Engineering to gain from this budgetary push.
Steel
On the steel front, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, anticipates that the government may raise import duties on metals to protect domestic players from the adverse effects of cheap Chinese imports. Such a move would help Indian steel manufacturers, who are currently facing margin pressures due to the low-cost steel from China. Companies like JSW Steel, Tata Steel, and Jindal Steel & Power could benefit from this protective stance.
Manufacturing
In the manufacturing sector, the government’s initiatives such as the Production Linked Incentive (PLI) scheme have already bolstered India’s position as the second-largest mobile phone producer globally. Shah expects the government to continue promoting domestic manufacturing, particularly in electronics and textiles, with additional trade restrictions and incentives. Key stocks under this theme include Dixon Technologies, Arvind Mills, and KPR Mills.
Consumption
The consumption sector is also under scrutiny, with expectations for a moderate increase in cigarette taxes and heightened budgetary allocations for initiatives such as the PM Awas Yojana. Aniruddha Sarkar, CIO and Portfolio Manager at Quest Investment Advisors, believes that while these measures could give a temporary boost to consumption, their long-term impact may be limited. Stocks like ITC and HUL are expected to remain in focus as the sector adapts to these changes.
Automobile
Lastly, the automobile sector is likely to gain from continued support under the PM E-Drive and Auto PLI policies, which are designed to accelerate the localisation of electric vehicle (EV) components. Tax cuts or increased funding for rural schemes, such as MGNREGA, may also support demand for automobiles. Moreover, enhancements in tax breaks for housing loan interest and higher allocations for housing could offer further stimulus for the sector. Investors are looking to companies involved in EVs and rural-focused initiatives, expecting companies in this sector to benefit from favourable policies.
