Get Instant Loan up to ₹10 Lakh!
Post-Budget 2025: Five Underrated Investment Themes to Focus
Union Budget 2025-26 emphasises inclusive growth through private sector involvement, nuclear energy investment, and support for footwear and textile industries, predicting increased consumer spending and market opportunities.
Quoting the renowned Telugu poet and playwright Shri Gurajada Appa Rao, the finance minister presented the Union Budget 2025-26. The theme,"Sabka Vikas," aims to reinforce a vision of balanced and inclusive growth.
After months of public discourse - especially on social media—about high taxes and slowing consumption, it seems the finance minister has taken note. The Budget strikes a careful balance between fiscal prudence, boosting consumption, and sustaining capital expenditure. Notably, it manages to do so without any major negatives, which is a win in itself.
Global investors keep a close eye on India's fiscal discipline, and this Budget sends the right signals. The fiscal deficit has been brought down to 4.4%, reinforcing confidence in the country's financial stability. Additionally, a roadmap has been laid out to reduce government debt-to-GDP from 57% to 50% by FY31. This may be seen as a positive by the FIIs who have been on a selling spree lately.
A shift in focus from government-led spending to private capex opens up interesting new opportunities. Markets have been undergoing a healthy correction over the past few months, helping valuations reset. Many stocks are currently trading within ±5% of their 200-day moving averages, making this a good time to start accumulating. While defense and PSUs dominated headlines in 2023-2024 and are now taking a breather, the Budget's tailwinds could give a fresh push to underrated themes that haven't yet had their breakout moment. The landscape is evolving, and keeping an eye on emerging trends could prove worthwhile in the months ahead.
Nuclear Power
India is taking bold steps to open its nuclear sector to private players. The government plans to amend the Atomic Energy Act and the Civil Liability for Nuclear Damage Act, enabling private investment and innovation. This move is expected to accelerate the development of new nuclear projects and technology.
As part of the Union Budget 2025-26, ₹20,000 crore has been allocated for the Nuclear Energy Mission under the "Viksit Bharat" initiative. The goal is to build five indigenously designed Small Modular Reactors (SMRs) by 2033. These compact reactors are highly efficient and ideal for cities and industrial hubs.
India aims to grow its nuclear capacity from 8,180 MW to 22,480 MW by 2031-32. By 2047, the country plans to produce 100 GW of nuclear energy. Achieving this goal will require significant infrastructure and raw materials. (source: PIB)
As the nuclear sector expands, companies involved in reactor equipment, uranium supply chains, and nuclear technology are expected to see increased demand.
Footwear Industry
India's footwear industry is the second largest globally after China. It stood at $26 billion in the domestic market in 2024 and is expected to hit $90 billion by 2030 (as per a Global Trade Research Initiative (GTRI) report. The drive comes from over 65% of the population less than 35 years old. These are changing consumer preferences to non-leather footwear.
Non-leather footwear, once a minor player, now dominates with a 75% market share projected by 2030.
The e-commerce sector has contributed significantly to this growth, with footwear expected to make up one-fourth of India's fashion e-commerce market in FY 2024. Online sales are robust, reflecting the convenience of digital payments and omnichannel retailing, though offline channels still lead.
Recent government initiatives under Budget 2025 could give a positive tailwind to the sector. Union budget 2025-26's "Focus Product Scheme" for the footwear and leather sectors is set to generate 2.2 million jobs, ₹4 trillion turnover and targeted exports of over ₹1 trillion. This initiative, combined with tax incentives and the removal of export duties, will boost India's status as a footwear manufacturing hub. Opportunities may arise in domestic brands with strong distribution networks and a focus on "Make in India" initiatives. These companies may benefit from the growing demand for locally produced goods and the government's support for domestic manufacturing.
Cotton-Textile
Union Budget 2025-2026 ₹500 crore "Cotton Mission" aims to improve cotton production and introduce extra-long staple cotton varieties. With India facing a cotton shortage and yields below global averages, this scheme seeks to rejuvenate the sector. Additionally, the government allocated ₹5272crores for the Ministry of Textiles for FY 2025-26 providing essential support.
In addition to the budgetary allocation, the textile industry, especially MSMEs, can now tap into better access to credit, skill development, and infrastructure support. The Amended Technology Upgradation Fund and the PLI scheme will fast-track modernization in spinning and weaving mills. This will help the sector adopt advanced technologies, boosting efficiency. With the rise in disposable income, domestic demand for apparel is expected to be robust. These changes also pave the way for India's stronger integration into global supply chains, unlocking massive export potential.
Now may be a good time to focus on companies that are well-positioned to benefit from these changes. Firms with efficient cost structures, diversified product lines, and a strong international presence will likely lead the way in this policy shift.
Makhana (Fox Nuts)
The superfood of India, makhana, found its well-deserved place in the Union Budget 2025-26. It set the stage for growth in the makhana (foxnut) industry. A new Makhana Board will be established in Bihar to boost production, processing, and marketing.
This will help farmers tap into government schemes, improve their skills, and enhance productivity. With increased funding for niche farming and agricultural missions, there is momentum for crops like makhana, which is gaining global recognition as a superfood. The Board's support will drive the sector's growth, as Bihar produces nearly 90% of India's makhana.
The makhana market is one to watch. Brands like Farmley and Mr Makhana are already tapping into the health food trend with flavored makhana packs. The global demand for this gluten-free, low-fat snack is on the rise, and India's market potential is expanding. Small-cap or unlisted companies that are scaling up their supply chains could experience significant growth as the industry matures, especially with the new infrastructure and training support being introduced by the Makhana Board.
Several factors are set to drive growth in the makhana sector. Rising consumer demand for healthy snacks is contributing to a steady increase in sales. As more people opt for nutritious alternatives, the popularity of makhana, known for its health benefits, is growing both domestically and internationally. Government initiatives, such as research and quality certifications, are expected to support this trend by improving product standards and ensuring market competitiveness.
Retail
The Union Budget 2025-26 brings a long-awaited income tax breather, with income up to ₹12 lakhs p.a. now exempt from tax. This move is set to increase disposable income, boosting household spending and consumption. As a result, sectors like retail, which have already seen growth in footwear and cotton textiles, are poised for a further boom.
With more money in the hands of the middle class and youth, demand for both everyday goods like FMCG and premium products like electronics and luxury items is expected to rise. The Budget also hints at potential changes to GST structures, making goods more affordable and accessible for consumers.
Several factors will drive this retail surge. Changing consumer preferences, such as a growing focus on health-conscious and eco-friendly products, are reshaping the market. The rise of digital payments will streamline transactions, making shopping smoother and more convenient. Additionally, the availability of cheaper credit and government support for start-ups will fuel the growth of new retail ventures.
Companies in these sectors are positioned for potential growth. Brands in footwear, leather, and toys may benefit from new customs duty modifications and government initiatives. These factors could contribute to opportunities in retail stocks, particularly for those with the capacity to meet demand in both urban and rural markets.
Assess, Analyse, Accumulate
StockGro expert Mohammed Shoaib Dayma (SEBI RA INH000015525) evaluated these sectors and said,
The Pulse Self-Sufficiency Program will not only meet domestic demand and boost productivity but also reduce import dependence, offering a quicker solution to curb rupee depreciation. And with Makhana gaining global popularity, building robust infrastructure for organised production and exports is crucial before other economies seize the opportunity. While the Makhana Board is a step forward, faster action is needed to maximise its potential.
In short, a more organized agri-sector can also attract new players, benefit existing ones, and, along with new tax laws, revive the struggling consumption sector, giving consumer stocks a much-needed boost.
If you wish to further identify the stocks that present investment opportunities across these five sectors, connect with StockGro experts and capitalise on some strong emerging stock market trends.
So keep a close watch on these sectors, do your research and consider diversifying your investments.
Note to the Reader: This article has been produced on behalf of the brand by HT Brand Studio and does not have journalistic/editorial involvement of Mint.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Business NewsFocusPost-Budget 2025: Five Underrated Investment Themes to Focus
First Published:12 Feb 2025, 11:16 AM IST
- Top Gainers
- Top Losers
- 52 Week High