As the Union Budget 2025 approaches, market analysts anticipate that key sectors driving India’s economic growth will receive increased allocations and policy support. Expectations range from fiscal stability and investment incentives to targeted production-linked incentive (PLI) schemes. Here’s a look at the sectors likely to dominate discussions on Budget Day:
1. Renewable Energy & Solar
The renewable energy sector saw a massive budget allocation jump to ₹19,100 crore in FY25, compared to ₹7,848 crore last year. Further expansions under the PLI scheme are anticipated, focusing on upstream solar components like polysilicon and wafers.
Key stocks to watch: Adani Solar, Premier Energies, Suzlon, Waaree Energies
2. Electronics & Semiconductor Manufacturing
India’s mobile manufacturing sector witnessed a 17% YoY increase in smartphone exports during FY24. The government is likely to continue incentives, targeting ₹1.5 lakh crore in exports. SBI anticipates additional PLI investments to promote local manufacturing.
Key stocks to watch: Dixon Technologies, Havells India, Bharat Electronics
3. Pharmaceuticals & Healthcare
India’s pharmaceutical exports reached $54 billion in FY24, growing at 9% YoY. The upcoming budget is expected to further push the domestic production of active pharmaceutical ingredients (APIs) and promote healthcare R&D.
Key stocks to watch: Dr. Reddy’s Laboratories, Torrent Pharmaceuticals, Sun Pharma
4. Automobiles & Electric Vehicles (EVs)
The automotive sector is set to benefit from ₹25,938 crore in PLI incentives over the next five years. With EV penetration expected to grow to 4% for passenger vehicles and 7.6% for two-wheelers by FY26, significant localization efforts for EV components will be supported.
Key stocks to watch: Tata Motors, Mahindra & Mahindra, Hero Electric
5. Textiles
India’s textile exports are expected to surpass $20 billion by 2025 as the PLI scheme targets technical textiles and MMF segments. The ongoing China+1 strategy is expected to further drive export opportunities for Indian companies.
Key stocks to watch: Vardhman Textiles, KPR Mill
6. Steel
India’s steel consumption grew 13.66% in H1FY25, driven by increased infrastructure spending. Budget 2025 may introduce anti-dumping duties and extend PLI schemes to additional steel products.
Key stocks to watch: Tata Steel, JSW Steel, SAIL
7. Power Sector
The government is expected to launch a PLI scheme by FY25-end to encourage domestic manufacturing of power transmission equipment. This will reduce reliance on imports and stabilize prices amid rising demand.
Key stocks to watch: Power Grid Corporation, Siemens India, ABB India
As Budget 2025 unfolds, these sectors are likely to remain in the spotlight, with increased incentives and investments aimed at accelerating India’s overall economic growth trajectory.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
