Finance Minister Nirmala Sitharaman will present India’s budget for FY25 on July 23, marking the first budget of the Modi 3.0 government. Following the recent Lok Sabha elections, there are high expectations for the future of Asia’s third-largest economy.
Speculation is high about potential reductions in personal taxes and increased spending on consumer-focused sectors. Industries like consumer goods, real estate, housing finance, infrastructure, and automobiles are expected to benefit from a boost in consumption, according to brokerage firms. However, certain sectors may face challenges.
The government is likely to allocate more funds to rural schemes to boost consumption. Companies like Hindustan Unilever, TVS Motor, and Hero MotoCorp are expected to benefit from this, according to a report by Citi.
Jefferies noted that a small increase in tobacco taxes could positively impact ITC, the country’s largest cigarette maker. HSBC expects the continuation of production-linked incentive schemes designed to stimulate local manufacturing and job creation, which could benefit companies like Dixon Technologies, Ideaforge Technology, and Biocon. Additionally, capital goods firms like Larsen & Toubro could profit from increased capital expenditure.
Citi also mentioned that an increase in allocations for affordable housing could favour developers like Macrotech Developers and Sunteck Realty. Jefferies noted that an interest subsidy scheme for urban housing might boost firms like Aavas Financiers and Home First Finance.
India has allocated Rs 11,500 crore in subsidies over five years to encourage the adoption of electric vehicles (EVs). Analysts at Macquarie expect the government to maintain both the amount and duration of these subsidies, benefiting key players in the EV sector, including Tata Motors, Ola Electric, Olectra Greentech, and JBM Auto. On the other hand, if EV subsidies are lower than expected, it could benefit Maruti Suzuki, which has focused on hybrid vehicles rather than fully electric models.
