Union Budget 2025: Stock Ideas and Sectors to Watch
As Union Budget 2025 approaches, investors and market analysts are buzzing with expectations about potential policy announcements and their impact on various sectors. Emkay Global, a prominent brokerage firm, predicts a relatively quiet budget with a focus on continuity rather than dramatic changes. Here’s a detailed look at the sectors and stocks that might be influenced by the budget announcements.
Key Predictions and Nifty Target
Emkay Global is cautiously optimistic about domestic equities, with its Nifty target for 2025 suggesting an 8% upside over current levels. The brokerage remains 'overweight' on consumer discretionary and healthcare sectors while adopting an 'underweight' stance on financials and staples.
A significant shift in the tax regime may be on the horizon. The removal of the old tax regime could end 80C/80D exemptions, potentially impacting life and health insurance companies negatively. However, a potential doubling of life insurance cover under PMJJBY and PMSBY might provide some relief to insurance players.
Stock-Specific Ideas and Sectors
Here are some potential winners and losers based on expected announcements:
1. Steel and Metals
Positive Impact: Safeguard duty on flat steel would benefit major steelmakers like Tata Steel, Jindal Steel, SAIL, and JSPL.
2. Life Insurance
Negative Impact: Removal of tax exemptions under Section 10 (10(D)) and harmonization of corporate tax rates at 14.6% could hurt insurers like LIC, HDFC Life, and SBI Life.
Positive Sentiment: Doubling insurance cover under government schemes might boost confidence in the sector.
3. FMCG Sector
Reduction in palm oil duty could benefit companies like Britannia, Nestle, and HUL.
A double-digit excise tax hike on cigarettes would negatively impact ITC, while no hike or a minor increase would be a relief.
4. Green Energy and EVs
Policy push on green hydrogen could be favorable for companies like Reliance Industries, L&T, and Thermax.
Increased EV bus deployment would positively impact Ashok Leyland, Tata Motors, and Olectra Greentech.
5. Healthcare
GST reduction on health insurance or import duty cuts on medical equipment would benefit Max Healthcare, Rainbow Children's Hospitals, and others.
6. Infrastructure and Railways
Allocation for new tracks is expected to rise by 50% YoY to ₹50,000 crore in FY26, boosting railway logistics. This would positively impact stocks like RVNL, KEC International, and CG Power.
7. Renewable Energy
Any push for the PM Surya Ghar Yojana would benefit solar players like Waaree Energies and Premier Energies.
8. Technology and Electronics
Sops on electronic component PLI schemes and semiconductor design guidelines would favor Dixon, Kaynes Technology, and Optiemus Infracom.
What to Avoid
While certain sectors may shine, others face challenges:
Life Insurance Players: Removal of exemptions and harmonization of taxes may create headwinds.
Jewelry Companies: An increase in customs duty on gold could hurt companies like Titan and SENCO Gold.
Key Takeaways
Union Budget 2025 may not deliver dramatic surprises, but its subtle moves could shape the market trajectory for the coming year. Investors should stay vigilant and align their strategies with sectoral developments.
Reference from:-https://www.businesstoday.in/union-budget/story/itc-rvnl-lic-waaree-energies-tata-steel-union-budget-2025-stock-ideas-462080-2025-01-27