As investors gear up for the Union Budget, stock market investors are bracing for a careful balance between fiscal consolidation and growth‑supportive spending. Across brokerages, the core expectation is that Finance Minister Nirmala Sitharama will stick to the glide path while still pushing hard on public capex to keep the investment cycle intact.
Domestic brokerages like Bajaj Broking, Motilal Oswal and Axis Direct broadly converge on three big themes: sustained infrastructure and defence spending, targeted support to housing and rural demand, and an ongoing thrust on power and renewables.
“For the market, the key things to watch are the extent of fiscal consolidation, capex, and sector-level actions. Of particular interest will be capital market reforms to encourage a revival in foreign portfolio flows,” said Morgan Stanley’s Ridham Desai.
Market insiders expect the government to continue with the higher defence capex spend (12% growth) while other capex may grow by 8%.
Capex and infra: L&T, Siemens, KEC, Ultratech
Brokerages see infrastructure as the Budget’s central pillar, with continued emphasis on roads, railways, urban infra and logistics. Motilal Oswal and Axis Direct highlight engineering and construction majors such as Larsen & Toubro, Siemens and KEC International as key beneficiaries of another leg of government‑led capex.
Infrastructure continues to be a strong theme with visible order pipelines and improving execution, analysts say, arguing that order‑book conversion and operating leverage could drive earnings upgrades in the coming quarters. Ultratech Cement also features in the pre‑Budget screens as a play on housing and infrastructure‑led cement demand, with analysts expecting utilisation and pricing to hold up if public works and PMAY spending remain robust.
Defence and railways: HAL, BEL, BDL
Defence and railways are identified as high‑conviction policy themes, backed by Make in India, indigenisation and safety‑cum‑capacity upgrades. Motilal Oswal places Hindustan Aeronautics (HAL), Bharat Electronics (BEL) and Bharat Dynamics (BDL) among core ideas ahead of potential increases in capital allocations and R&D spends.
Bajaj Broking underlines that “defence priorities include R&D and indigenous capabilities, while railways focus on safety systems and faster execution,” suggesting an extended multi‑year opportunity rather than a one‑off Budget trade. With a healthy order pipeline in missiles, avionics and communication systems, the reports argue that these companies are well positioned to benefit from both domestic orders and export opportunities.
Power and renewables: NTPC, Tata Power
The power and renewables complex also finds a clear place in the Budget watchlists, with expectations of higher allocations to transmission, green energy and grid modernisation. Motilal Oswal and Axis Direct point to NTPC and Tata Power as preferred ideas, citing their scale, diversified portfolios and readiness to capitalise on new schemes in solar, wind and storage.
Analysts say investment momentum in power is “shifting from pure expansion to modernisation”, with a sharper focus on renewables and network reliability. In this scenario, integrated utilities that can execute large projects and manage balance sheets prudently are expected to emerge as key beneficiaries of any Budget‑led acceleration in the energy transition.
Housing and real estate: Godrej Properties, Brigade
On the consumption side, housing and real estate appear as a structural derivative of both capex and welfare priorities. Motilal Oswal highlights Godrej Properties and Brigade Enterprises as ways to play a sustained residential upcycle supported by PMAY allocations and urban infra spending.
The brokerage notes that “policy continuity in housing and urban development remains crucial for sustaining demand”, suggesting that any incremental Budget support for affordable and mid‑income segments would reinforce the positive trend. Combined with benign supply dynamics in key markets, the three reports argue that branded, balance‑sheet‑strong developers are likely to remain in favour with long‑term investors.
How brokerages suggest playing Budget volatility
On the index front, Bajaj Broking expects Nifty to remain in a range, advising a “buy‑on‑dips” approach rather than chasing intraday spikes around the Finance Minister’s speech. Its derivatives strategy points to strong support nearby, reinforcing the case for accumulating quality names on corrections in preferred Budget themes like infra, defence, power and housing.
Motilal Oswal and Axis Direct strike a similar tone, urging investors to focus on execution‑heavy, policy‑aligned franchises instead of speculative thematic bets.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
