Market analysts are hopeful that the government will provide incentives and allocations for some of the major industries that contribute significantly to the economy’s overall growth since the Union Budget is just one day away.
With a recent report from HDFC Securities indicating that domestic cyclicals are likely to make a comeback in 2HCY25, the forthcoming Budget is anticipated to prioritize tax changes and fiscal stability while encouraging private investment. The broking business views the healthcare, consumer discretionary, and financial sectors as some of the more favorable industries.
The following are the main areas of Budget 2025 to keep an eye on:
1. Solar & Renewable Energy
The budgetary allotment for the renewable energy industry increased significantly in FY25, from Rs 7,848 crore to Rs 19,100 crore. In Budget 2025, additional PLI increases are anticipated, particularly in upstream solar components like polysilicon and wafers. By mid-2026, Adani Solar intends to increase its combined solar cell and module production capacity to 10 GW, solidifying its place as a major force in the Indian solar industry. Other stocks in the renewables industry to keep an eye on are Premier Energies, Suzlon, and Waaree Energies.
2. Manufacturing of Electronics and Semiconductors
The electronics industry is still booming, especially in the mobile manufacturing sector. India’s smartphone exports increased 17% year over year in FY24. Foxconn, Wistron, and Pegatron, Apple’s contract manufacturers, have made a substantial contribution to this expansion. With ongoing momentum towards a target of Rs 1.5 lakh crore in mobile exports, SBI anticipates higher investments in electronics and exports that will transcend Rs 1.5 lakh crore in FY25.
3. Healthcare & Pharmaceuticals
The pharmaceutical industry in India grew 9% year over year to reach $54 billion in FY24. India is the biggest exporter of generic medications worldwide, and the ongoing drive to produce APIs domestically will increase dependability and lessen reliance on China.
4. Cars and Electric Vehicles (EVs)
Over the next five years, it is anticipated that the Indian automobile industry will get Rs 25,938 crore in PLI incentives, with a particular focus on electric vehicles. The EV sector still has room to grow in comparison to the other sectors, even if the 2025 projection indicates that the vehicle sector is predicted to maintain single-digit sales growth while EBITDA margins may decline.
5. The Textile Industry
The value of India’s textile sector is estimated at $140-145 billion, and exports increased in FY25. The textile industry’s growth is anticipated to be further stimulated by the PLI plan, particularly for technical textiles and the MMF category. Experts predict that India’s textile exporters will continue to gain from the China+1 policy, thus companies in this industry are worth keeping an eye on. Companies like Vardhman Textiles and KPR Mill are expected to see further growth as India targets $20 billion in textile exports by 2025.
6. Steel Industry
Government infrastructure spending was the primary driver of India’s 13.66% increase in steel consumption in H1FY25. The PLI program will probably be expanded to include more steel products, and Budget 2025 will prioritize anti-dumping charges to safeguard domestic steel producers.
While policies like safeguard duties to protect domestic manufacturers from cheaper imports will be essential, companies like Tata Steel, JSW Steel, and SAIL are anticipated to benefit from the increasing demand.
7. Power Sector:
By the end of the current fiscal year, the Center intends to introduce a PLI program to encourage the production of transmission equipment. The majority of India’s power transmission equipment, such as transformers, circuit breakers, and switchgear, is imported, and since demand for these items exceeds global supply, prices have skyrocketed.
