Budget 2025 Market Verdict: Big voices cheer consumption push but keep an eye on valuations

As Budget 2025 creates a buzz across India's economic landscape, market experts are sharing their perspectives on the government's priorities and the potential impact on various sectors.

As Budget 2025 makes waves across the Indian economic landscape, market voices are sharing their perspectives on the government's priorities and the potential impact on various sectors. Here's a roundup of key insights compiled by Moneycontrol.

1. Raamdeo Agrawal, Chairman of Motilal Oswal Group - A 100/100 Budget: The veteran investor lauded the Union Budget 2025 as being '100/100', adding that there was 'no negative' to be found. "I would go by the market judgement that consumption, particularly, FMCG or Zomato (for example)  who sell small-ticket items would benefit clearly," said Raamdeo.  He suggested investors should favour digital and quick-commerce companies over those trading at sky-high valuations of 100x P/E. "Broadly, if consumption is to happen, where is the actual value lying? I would say that all the digital and quick commerce companies are a good place to get a booster than the 70x, 80x, 100x P/E old companies, where the growth rates at best are 10-15%, unlike the former, where it is like 70-80%." Raamdeo added that entire tax benefit might not flow directly into consumption, and instead, a substantial portion of this relief could be channelled into capital markets. Also Read | Modi’s big middle class outreach, tax changes to put more money in pocket: 5 political takeaways from Union Budget
2. Pankaj Tibrewal,  IKIGAI Asset Manager - Consumption the only 'point of joy': With Budget 2025 falling short on capital expenditure, the onus now shifts to the central bank to drive economic growth, Tibrewal, founder and CIO of IKIGAI Asset Manager told Moneycontrol. "Clearly, this year has not been that great on the capex side, and that has led to the slowdown going into the Union Budget. The expectation was a 15-20% growth for FY26 over (FY25's) Revised Estimate, which is about Rs 10.18 lakh crore, (but the government has allocated) about Rs 11.2 lakh crore, which is approximately July number (for FY25).... May be, plus-minus few thousand crores. So, that has been a bit of a dampener... and we can be in our low-growth environment for some time, till private sector capex picks up." The 'only point of joy' came from the boost to the consumption theme, said Tibrewal.
3. Vikas Khemani, Founder, Carnelian Asset Management and Advisors: While consumption did remain a hot topic of budget, Khemani said valuations for most consumer stocks remain steep, trading at 60-70x earnings. Large consumer firms face valuation concerns and potential disruption from newer players, while smaller players are gaining traction with better risk-reward dynamics. The idea, according to Khemani, is to look at stories with respect to volume favour. "Structurally speaking, many consumption stocks have not performed in the last five years and may not perform in the next five years because of their poor valuation, and also potential disruption happening in those large big names." At the same time, smaller consumer companies have been growing faster, and they are also getting better risk rewards, said Khemani. "I would say that consumer stocks may not be in a one-way run", and the story has to be there "based on the valuation". Also Read | Budget puts an additional Rs 1 lakh crore in the hands of consumers
4. Prashant Khemka, founder and managing director of WhiteOak Capital Management - Beyond consumptionWhile one cannot mention Budget leaving behind consumption, Khemka expressed optimism about the long-term potential of the IT services sector, particularly as global companies increase their investments in AI. "Concerns about AI disrupting IT services are misplaced. In fact, the growing need for AI preparedness and adoption will likely drive demand for Indian IT firms, especially those with a proven track record in execution and adaptability to technological shifts. We continue to see attractive opportunities, particularly in mid-cap IT," he said.
5. Saurabh Mukherjea, Chief investment officer of Marcellus Investment Managers - What can drive growth for private healthcare?In the Budget 2025 speech, Finance Minister Nirmala Sitharaman also announced initiatives to promote medical tourism in collaboration with the private sector, including streamlined visa access. "While the Finance Minister did not mention Ayushman Bharat in the budget, if it remains a key focus for the government, it could become a growth driver for private healthcare, diagnostics, and medical equipment companies," Mukherjea told Moneycontrol. Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY), is a national health insurance scheme providing free health coverage to low-income individuals, ensuring access to essential medical services. Disclaimer:The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.