Budget 2025: Infra, agri potential investment opportunities amid likely policy attention, says Atul Parakh of Bigul

Budget 2025: Atul Parakh, the CEO of Bigul, recently spoke with Mint about major trends in the stock market, the upcoming Union Budget for 2025, the sectors most impacted, those that typically offer the best opportunities, and various trading strategies for Budget Day. Parakh highlighted that instead of engaging in short-term trades on Budget Day, investors would benefit more from examining the Budget’s structural impacts and making well-informed investment choices grounded in long-term policy trends.

Edited excerpts:

What do you anticipate will be the significant stock market trends and key factors impacting 2025?

As we enter 2025, we expect a mixed outlook for the stock market, influenced by several macroeconomic factors and geopolitical dynamics such as the return of Donald Trump to the White House, US-China relations and ongoing conflicts like Russia-Ukraine, Easing inflation rates and potential interest rate cuts.

What are the overarching macroeconomic trends influencing market sentiment?

The broader macroeconomic environment will play a crucial role in shaping market dynamics in 2025. Fiscal and monetary policies will significantly impact economic growth and market stability. Changes in tax policy, government spending, and interest rate adjustments by central banks will be closely monitored by investors as indicators of future market conditions. The interconnectedness of global markets means that events in one region can have ripple effects elsewhere. Market participants’ expectations regarding future economic conditions will drive speculative behaviors, impacting stock prices irrespective of underlying fundamentals and fluctuations in supply chains.

With the Union Budget 2025 approaching, which sectors are most affected, and which usually present the best opportunities?

As we approach the Union Budget 2025, infrastructure, agriculture, and export-oriented sectors are likely to see significant policy attention and potential investment opportunities. The government’s continued emphasis on capital expenditure, which grew 28.4% in FY24 and is expected to grow 17% in FY25, positions infrastructure and allied sectors favourably. With persistent inflation concerns, particularly in food prices (CPI at 6.21% in October 2024), agricultural infrastructure and supply chain companies could benefit from expected policy interventions in cold storage and digital marketplace development.

Export-oriented sectors, especially in high-value manufacturing, which increased their share from 17.6% in FY14 to 29.5% in FY24, might see support through schemes like RoDTEP and Interest Equalization. Additionally, sectors aligned with skill development and employment generation could see increased allocations, given the government’s focus on leveraging India’s demographic dividend and improving labour force participation rates.

Do you have any trading tips for investors on the day of the Union Budget?

Given the market volatility typically associated with Budget Day, investors should focus on sectors with clear policy visibility rather than making speculative trades. The documents indicate several sectors with strong policy momentum: infrastructure spending has shown consistent growth with a 28.4% increase in FY24 and a projected 17% rise in FY25; export-oriented sectors, particularly in high-value manufacturing, have demonstrated robust growth trends; and the services sector has maintained strong performance with 7.6% growth in FY24.

However, key risk factors like inflation (CPI at 6.21% in October 2024) and geopolitical uncertainties suggest caution. Rather than making short-term trades on Budget Day, investors would be better served by analysing the Budget’s structural implications and making informed investment decisions based on longer-term policy directions, particularly in sectors aligned with the government’s demonstrated priorities in infrastructure development, export promotion, and employment generation.

After strong Accenture results and better-than-expected TCS Q3 results, is it opportune to accumulate IT stocks?

While Accenture’s Q1 revenue beat ($17.7 billion vs. $17.12 billion expected) and TCS’s performance suggest early signs of sector recovery, a selective approach to IT stocks is warranted. Accenture’s improved operating margin (up 90 bps YoY to 16.7%) and successful execution of large deals are positive indicators. However, key concerns persist: soft deal bookings, continued pressure on discretionary IT spending, and lack of clarity on 2025 IT budgets. The divergent views from major brokerages highlight the sector’s complex outlook; while there is opportunity in TCS, Infosys, and Coforge, it raises concerns about weak order books and competitive pressures.

Most notably, Accenture’s robust net hiring amid unchanged demand suggests improving revenue visibility. For investors, this indicates a potential accumulation opportunity, but with careful stock selection focusing on companies with strong execution capabilities and healthy deal pipelines rather than a broad-based sector approach.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.