Budget 2025: RVNL, IRFC, L&T, among 12 stocks across different sectors expected to gain. Check StoxBox’s top picks
- Budget 2025: The Union Budget for FY 2026, set to be announced on February 1, 2025, is expected to boost sectors like Real Estate, Cement, Railways, and Road/Construction. Analysts predict increased allocations and incentives to attract foreign investments and enhance infrastructure funding.
Budget 2025: The country is looking forward to the Union Budget for FY 2026, which will be unveiled by Union Finance Minister Nirmala Sitharaman of the Modi 3.0 government on February 1, 2025, at 11:00 IST. Given the recent trends in the domestic and macroeconomic landscape, investors are considering which sectors might experience growth and could be attractive for investment based on the announcements made by the Finance Minister.
According to Manish Chowdhury, Head of Research at StoxBox, specific sectors such as Real Estate, Cement, Railways, and Road/Construction are under scrutiny as per the pre-budget expectations he outlined.
Chowdhury is optimistic that the forthcoming budget will introduce initiatives, particularly streamlined regulations and certain incentives, to entice foreign investments into the commercial real estate market.
Additionally, it is expected that the government's allocation for infrastructure projects will rise, with capital expenditure projected to increase by about 10-12% from ₹11.11 lakh crores in the FY25 budget. Manish Chowdhury foresees an enhanced budget for the railway sector, anticipating a 15-18% rise in funding for this area. In the previous budget, ₹2,62,200 crores were designated for the railway sector, highlighting passenger safety through the rollout of the Kavach anti-collision system and the development of infrastructure.
Stocks and sectors in focus
Real Estate
Manish Chowdhury noted that they believe the escalating prices of raw materials, the rising costs of land, and the outdated criteria for affordable housing—particularly in metropolitan areas—are significant challenges that discourage developers from engaging in the affordable housing market. It is essential to update the affordable housing parameters regarding both size and price according to the unique dynamics of each city to rejuvenate this segment.
“With the aim to stimulate demand across all segments of housing, the government may look to raise the deduction limit for home loan interest from the current level of ₹2 lakh per year. From a budget perspective, we remain positive across the real estate value chain and Oberoi Realty, PNB Housing, and AAVAS Financiers remain our top picks,” added Chowdhury.
Cement
StoxBox holds an optimistic view regarding the emphasis on infrastructure investment, which is expected to greatly benefit the cement industry. The rollout of the National Monetization Pipeline is likely to enhance public-private partnerships, creating a strong foundation for infrastructure advancement. Furthermore, there have been suggestions to lower the GST on cement from the existing 28% to make housing more accessible. These initiatives are anticipated to stimulate significant growth in urban infrastructure and affordable housing, aiding the overall progress of the nation’s infrastructure and economy.
“From a budget perspective, the outlook for the cement sector remains positive, with Ultratech, Ambuja, and ACC identified as our top picks,” said Manish Chowdhury.
Railways
Manish Chowdhury suggests that to improve railway infrastructure, the upcoming budget is expected to feature new procurements for rolling stock, freight coaches, and wheels. Furthermore, the government's initiative to promote Make in India may generate fresh opportunities for manufacturers of railway equipment. In terms of budget considerations, the forecast for the railway industry appears optimistic, with RVNL, BEML, and IRFC highlighted as key choices.
Road/Construction
Chowdhury stated that the government is expected to raise the budget allocation for the Ministry of Road Transport and Highways (MoRTH) by 5-6%. This increase is anticipated to encourage private investments in highway projects, especially those awarded under the build-operate-transfer (BoT) toll model, with around 20-25% of projects likely to use this model. Furthermore, the allocation will assist MoRTH in speeding up highway construction and alleviating the high debt burdens faced by the National Highways Authority of India (NHAI).
For the fiscal year 2026, MoRTH may aim to construct and award 12,000-13,000 kilometers of national highways to maintain the momentum of development in the coming years. There will also be a strong emphasis on rural road development, with a proposed 10% increase in funding for the Pradhan Mantri Gram Sadak Yojana (PMGSY).
“From a budget perspective, the outlook for the road/construction sector remains positive, with L&T, KNR Construction and Ashoka Buildcon identified as our top picks,” said Chowdhury.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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