Budget 2025: HDFC Bank, Zomato to Biocon – Rahul Ghose of Hedged.in suggests 6 stocks to buy ahead of Union Budget

Budget 2025: The Union Budget for FY25-26 will be presented by India’s Finance Minister, Nirmala Sitharaman, on February 1, 2025. Experts believe that the effect of the Union Budget on the equity markets has significantly decreased in recent years, as the government has been implementing most reforms beyond the Budget’s scope.

H1FY25 faced difficulties due to a general decrease in government expenditure, stricter credit conditions in unsecured lending, a slowdown in consumption, particularly in urban areas, prolonged monsoon conditions, and inflation. These combined factors have led to a decline in corporate earnings during the first half of FY25, according to analysts.

In this context, market participants view the FY26 Budget as a pivotal factor for driving growth in the Indian economy and, correspondingly, in the Indian markets. To date, the Nifty 50 index has fallen approximately 12% from its peaks in September 2024. Considering the recent domestic and macroeconomic trends, investors are evaluating which sectors may show growth potential and could be appealing for investment based on the Finance Minister’s announcements.

According to Rahul Ghose, CEO of Hedged.in, markets are expecting measures to boost manufacturing, infrastructure, and rural spending in the upcoming budget. Incentives for renewable energy, tax relief for middle-income groups, and policies encouraging private investment would be key positives. Clarity on fiscal deficit targets will also be closely watched. Reforms in insurance sector would be closely watched as government’s aims for ambitious target of insurance for all

Themes like renewable energy, manufacturing under the PLI scheme, financial inclusion, and affordable housing stand out. Additionally, sectors like FMCG, healthcare, and IT remain attractive for their defensive characteristics amid volatility.

Stocks and Sectors to Watch

According to Ghose, FMCG stocks have fallen substantially from the highs discounting most of the negatives and are available at good levels.

Many pharma stocks like Biocon, Lupin, Dr Reddy are in a strong uptrend and any dip could potentially be a buying opportunity as another theme.

Keeping Quick commerce in mind, Zomato also looks like a good bet. HDFC Bank in financials, and Biocon in healthcare stand out apart from Zomato.

Most of these companies have strong balance sheets or are have momentum going for them. They are well-positioned to benefit from long-term sectoral tailwinds. In IT apart from largecaps, some mid cap IT stocks like Birlasoft are available at good prices technically as well as fundamentally.

“We don’t expect any particular sector to be losers but in general we expect 2025 to be a lackluster year with 27,200 being the upside target, which is about 10% on the upside. 2025 might see a time consolidation as well apart from having a price correction to the 21,000 levels,” said Rahul Ghose.

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.