Budget 2025 presents fresh investment opportunities in consumer discretionary plays, says Prashant Khemka

Prashant Khemka, founder of WhiteOak Capital

Investors may find fresh opportunities in consumer discretionary stocks, spanning industries such as automobiles, retail, and FMCG, as the 2025 Union Budget remains centered on pro-consumption measures, said Prashant Khemka, Founder of WhiteOak Capital Management, in a conversation with Moneycontrol.

"The government has made it clear that consumption will remain a key focus for many budgets to come. Given the subdued consumption trends over the past few quarters, several consumption-related companies have reported weak earnings, leading to suppressed valuations. This presents a compelling investment opportunity," Khemka noted.

On the taxation front, the budget raised thresholds for TDS and TCS, reinforcing its pro-consumption stance. Additionally, the increase in the income tax limit, coupled with a measured 10% rise in capital expenditure, aligns with a shift towards fiscal sustainability. While previous budgets saw capex growth in the high teens, the current approach suggests a recalibration to a more manageable 10 percent, he added.

Beyond consumption, Khemka also expressed optimism about the IT services sector, highlighting its long-term potential as companies globally ramp up AI investments. "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 remarked.

Underlining the key takeaway from 2025, Khemka noted that Finance Minister's focus on ease of doing business will be crucial for long-term growth. Faster economic growth would lead to job creation, higher incomes, increased spending, improved corporate profitability, and stronger market returns, creating a cycle of sustained economic expansion.

A notable aspect of the budget was the discussion on Section 9A and Section 3B, Khemka added, which were proposed a decade ago but have yet to be operationalised due to various structural challenges. Addressing these issues could significantly improve investment flows and market efficiency.