Post-Budget, overweight on energy transition theme, power, banks, infra NBFCs, says OmiScience's Vikas Gupta

Vikas Gupta is the CEO and Chief Investment Strategist at OmiScience Capital

• Overweight on energy transition theme, power sector
• Optimistic on infrastructure, especially, railways, roads, freight and logistics
• Defence and manufacturing should continue benefiting in medium term

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Vikas Gupta, the CEO and Chief Investment Strategist at OmiScience Capital is overweight on the energy transition theme and the power sector. This is also supported by domestic data centers for domestic and international offerings, he said in an interview to Moneycontrol.

He is also optimistic on infrastructure, especially, railways, roads, freight and logistics. Irrespective of the budget, he continues focus on banks and infrastructure NBFCs.

According to him, the near-and medium-term outlook for infrastructure remains strong, while defence and manufacturing should continue benefiting in the medium term as the infrastructure-related expenditures help in terms of more competitive manufacturing capabilities with lower friction in terms of logistics costs.

How would you rate Nirmala Sitharaman’s ninth budget on a scale of 1–10?

Would rate it at 8.5.

What are the key hits and misses of the budget?

There was a lot of expectations from market participants on capital market-related tax reforms. However, most people expecting concessions on capital gains were disappointed. Rather the Securities Transaction Tax (STT) was increased in futures and options which was disappointing for some.

Some of the important pluses were the increase in total capex budget by 22% while increasing the revenue expenditure by just 6.7%. A nearly $200 billion capex budget is a strong indicator of future growth for the economy, given that capex is a gift that keeps on giving for many years in the future.

Defence budget is seeing a slow increase given the already large size that it has reached. Focus on the 7 high-speed corridors and the east-west freight corridors emphasized the continued focus on railways as the backbone of the economy. Also, the announcement of 20 new national waterways, and the focus on sea plane manufacturing and ship repair etc. emphasized the importance of waterways within infrastructure.

Also, the focus is on sunrise areas of manufacturing, such as semiconductors, bio-pharma. rare-earths, electronic manufacturing and services areas, such as data centers. was important indicator of futuristic focus.

Do you believe the government can maintain its commitment to fiscal consolidation while increasing capex to Rs 12.2 lakh crore?

So far, the government has been able to maintain fiscal discipline even during the tough times. The future growth at more than 7% real GDP growth and low inflation regime should be easier for the government to maintain discipline. With long-term growth-oriented measures, the growth in receipts should actually be faster than the growth in budget expenditures. The government has also done a tough trade-off of growing the revenue expenditure much slower compared to capex as discussed earlier.

Will the budget and the higher capex allocation strengthen the medium-term outlook for infrastructure, defence, and manufacturing?

The near-and medium-term outlook for infrastructure remains strong, while Defence and manufacturing should continue benefiting in the medium term as the infrastructure-related expenditures help in terms of more competitive manufacturing capabilities with lower friction in terms of logistics costs. Defence benefits as the overall infrastructure and manufacturing ecosystem becomes more sophisticated.

Which sectors or themes would you prefer to invest in after reading the budget?

Irrespective of the budget we continue focusing on banks and infrastructure NBFCs, which we have been overweight on even before the budget. The focus on banking sector reforms and NBFC restructuring only helps.

Further, we are overweight on the energy transition theme and the power sector. This is also supported by domestic data centers for domestic and international offerings. Infrastructure, especially railways, roads, freight and logistics is another area which we are optimistic on.

Has the budget adequately focused on job creation, which has been a major concern?

Lots of focus on job creation, especially within the services sectors and healthcare and tourism. While it can always be debated that more measures could have been undertaken, job creation is a function of capex, and we should see significant boost as the economic growth takes off.

Do you expect a significant increase in NRI investment after the government doubled the investment limit to 10%?

NRIs have always been interested in investing in India, and the increased limit should support that. However, whether there will be an immediate increase in investments is difficult to say. But in the medium term, this limit too is likely to be reached.

Will the budget boost the confidence of foreign investors, or could it disappoint them, given that they were major sellers last year and even in January 2026?

The FIIs could be selling due to other reasons such as the yen-carry trade becoming more difficult or finding other emerging markets, such as, Taiwan and Korea being relatively undervalued as well as showing potential high-growth areas related to AI. The budget showcased an economy which has fiscal discipline and is likely to become the 3rd largest economy in the world within the next couple of years. The focus on capex investments to boost infrastructure and long-term growth is also clear. Any long-term oriented FII would be viewing the budget positively.