The highlight of the Union Budget 2025 -- the eighth consecutive budget presented by Finance Minister Nirmala Sitharaman – was the tax relief offered to the vast middle-class community as the tax-free income slab was raised to Rs 12 lakh.
The tax break is largely expected to boost disposable income while revitalising urban demand, which had been weighed down by sluggish wage growth and inflationary pressures. While a revival in urban demand is beneficial for the whole consumption pack, new age players that are dependent on higher disposable incomes stand to benefit more.
Zomato, Swiggy may rise in ranks
Several brokerage firms have identified new age food delivery aggregators Zomato and Swiggy as the key beneficiaries of the budget driven consumption push. Even within the two rivals, bullishness for Zomato is higher than that of Swiggy.
While analysts at Axis Securities anticipate the overall premium FMCG, QSR and retail segment to benefit from a rise in disposable income, it chose Zomato as one of its top picks within the pack.
"Clearly, when your income level is about Rs 15-24 lakh and you get a benefit of about Rs 70,000-80,000, that money will go into consumption, and that is what the market is betting on. So, I would go by the market judgement that consumption, particularly FMCG companies, like Zomato, which sells small-ticket items, will get benefitted," market veteran Raamdeo Agrawal said in an interaction with CNBC-TV18.
Agrawal further went on to say that he would prefer quick commerce players over traditional FMCG names due to their strong growth rates and future prospects.
Meanwhile, PL Capital also believes the budget's support for gig workers, including online delivery workers also stand to benefit the two quick commerce players. These gig workers will be provided with identity cards and registration on the e-Shram portal. The scheme will provide healthcare and is likely to assist nearly 1 crore gig-workers.
Nykaa to get a glow
Like Zomato and Swiggy, beauty and fashion platform Nykaa is also poised to benefit from rising disposable incomes, according to Kotak Institutional Equities. The additional income in the hands of taxpayers is expected to fuel discretionary spending, making the budget a net positive for the entire consumption space.
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Investors are already factoring in improved growth prospects, as Nykaa’s stock surged 6 percent in two sessions following the budget announcement, mirroring the broader rally across consumption names.
Ixigo set to fly higher
Beyond traditional consumption plays, travel and tourism companies are also likely to benefit from rising disposable incomes and the budget’s infrastructure push for the sector.
The finance minister announced the upgradation of infrastructure at 50 key tourist destinations in collaboration with state governments, positioning India as a global tourism hub. Additionally, increased air connectivity to Tier 2 and Tier 3 cities under the UDAN scheme aims to democratise air travel.
"Development of tourism infrastructure augurs well for the growth of the travel and hospitality sector," Kotak Institutional Equities stated in a note.
The strong growth trajectory of India’s domestic air travel market, coupled with the government’s tourism push, is expected to favour Ixigo. The platform, which caters to middle- and lower-middle-class travellers through its flight and hotel booking services, stands well-positioned to capitalise on these developments.
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