Market on Budget Day: Consumer Stocks Up on Tax Cuts; Railway, Defence and Infra Stocks Wilt
Moneylife Digital Team 01 February 2025
On the occasion of Union Budget 2025-26 market was open on Saturday, 2081 stocks advanced, 1829 declined and 127 remained unchanged on Bombay Stock Exchange with advance decline ratio of 1.14 indicating a positive closing in the broader market. The Indian government's 2025-26 budget reveals a populist turn, with capital expenditure targets falling below expectations at Rs11.2 lakh crore, down from Rs11.5 lakh crore in FY24-25. This reduction caused stocks in railways, defense, and infrastructure sectors to decline. The budget's emphasis has shifted toward attracting private investment. Key priorities include tax benefits for middle class which has moved limelight towards sectors like consumer durables, automobiles, and fast-moving consumer goods (FMCG) and assistance for micro, small, and medium enterprises (MSMEs). The government has targeted a fiscal deficit of 4.4% with planned borrowing of Rs11.54 lakh crore. Notably absent from the budget are substantial initiatives for direct job creation, agricultural subsidies, or increases to minimum support prices.
 
You can read our comprehensive budget overview – 
 
The trend of the major indices on Saturday trading is given in the table below. 
 
 
On NSE, 35 securities advanced and closed at a new 52-week high whereas 39 securities sank to close at their new 52-week lows.  In sectoral indices, Nifty Energy, Nifty PSU Bank and Nifty IT were among the biggest losers. Nifty FMCG, Nifty Media and Nifty Auto were among the biggest gainers.
 
Defence stocks came under pressure as the budget allocation for the sector—typically 12% of government spending—was not explicitly mentioned in the Budget speech. Shares of Paras
Defence (-6.83%), Bharat Dynamics (-2.22 %), and Krishna Defence (-5.00%). 
 
Railways stocks like IRFC (-6.32%), RVNL (-9.43%), Texmaco Rail and Engineering (-9.31%), Titagarh rail systems (-6.77 %) fell as the total capex for railways remained unchanged at Rs2.5 lakh crore for FY25-26 while the market was anticipating a double-digit hike in railway capex. 
 
To address infrastructure funding, the government announced a Rs1.5 lakh crore interest-free loan for states and a Rs1 lakh crore urban development fund. A Rs10 lakh crore asset monetization plan was introduced to finance projects. However, concerns remain over the government's failure to meet its disinvestment targets.
 
A rally in consumer durable and FMCG stocks was infused by income tax relief up to Rs12 lakh which is expected to support consumer spending. Additionally, a Rs10,000 crore Fund of Funds was announced to support startups and direct-to-consumer (D2C) brands. Key gainers include - Godrej Consumer Products (+5.49%), Varun Beverages (+4.47%), Trent, ITC (+3.33%), Blue Star (+13.17%) and Crompton Greaves Consumer Electricals (+7.73%). 
 
The Union Budget 2025-26 has increased the allocation for the Ministry of New and Renewable Energy by 53.48% y-o--y to Rs26,549.38 crore. To boost domestic manufacturing in clean energy and electric mobility, a National Manufacturing Mission was launched. It focuses on producing solar PV cells, EV batteries, motors, controllers, electrolysers, wind turbines, high-voltage transmission equipment, and grid-scale batteries to reduce import dependence.  This boost helped renewable energy (RE) stocks like Suzlon Energy (+0.17%), Inox wind (+1.98%), Premier Energies (+5.81%), Waaree Energies (+0.10%). 
 
A Nuclear Energy Mission was announced to develop 100 GW of nuclear power by 2047, with planned amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act to encourage private sector participation. A Rs20,000 crore R&D initiative will support the development of small modular reactors (SMRs), with at least five expected to be operational by 2033. (SMRs: Compact nuclear reactors designed for efficient and flexible energy generation.)
 
Dixon Technologies (-2.14%) management highlighted that the increase in Basic customs duty on interactive flat panel displays from 10% to 20% as positive for the company. This change is expected to boost domestic manufacturing. Dixon has existing capacity and is setting up a new unit in Noida for display assembly. The the exemption of customs duty on parts like PCBA and camera modules as beneficial for their competitiveness.
 
Easy Trip Planners (+6.38%) shares surged following Finance Minister Nirmala Sitharaman's tourism initiatives in the 2025-26 Budget. Key announcements include developing 50 top tourist sites, extending Mudra loans to homestays, promoting medical tourism, and increasing the TCS (tax collected at source) threshold for LRS (Liberalised Remittance Scheme) to Rs10 lakh.
 
Stocks of animal aquaculture companies Godrej Agrovet (+2.77%), Waterbase (+1.24%), Avanti Feeds (+3.19%) and Apex Frozen Foods (+3.57%) advanced as the government introduced a framework to enhance sustainable fishing in India's exclusive economic zones and high seas, with a focus on Andaman & Nicobar and Lakshadweep. Additionally, the loan limit under the modified interest subvention scheme for farmers and fisherfolk has been raised from Rs3 lakh to Rs5 lakh. Further, the centre also proposed to reduce basic custom duty (BCD) from 30% to 5% on frozen fish paste (Surimi) for the manufacture and export of its analogue products. The government also propose to reduce BCD from 15 per cent to 5 per cent on fish hydrolysate for the manufacture of fish and shrimp feeds.India is the world's second-largest producer of fish and aquaculture, with seafood exports amounting to Rs60,000 crore. 
 
 
 
The top gainers and top losers of the major indices are given in the table below:
 
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