How Nifty 50 stocks are placed after Budget 2025

The Budget has addressed challenges to growth, by selecting consumption as its growth engine.

The Budget’s impact on Nifty 50 stocks will in part determine how the index moves in reaction to this annual event. Here’s a look at whether the outlook for Nifty stocks appear positive or negative after the budget. The picture that emerges is contrary to the lukewarm reception the Budget got on Saturday, February 1.

The Nifty 50 is a broad index with representation from domestic-focused businesses, global-dependent sectors as well as commodity-linked companies. The Union Budget 2025 broadly has had a positive impact on domestic-focused businesses. The overarching message is one of support to the consumption growth engine and adherence to the fiscal consolidation roadmap.

Union Budget 2025: Highlights

With rationalization of tax slabs and rates, India’s FM has endeavoured to put more money in the hands of the middle class to encourage spending, and create the right kind of demand to improve capacity utilization and ultimately pave the way for revival in private capex.

The first order beneficiaries are therefore consumer-facing businesses ranging from automobile companies like Maruti, Hero MotoCorp, Eicher to retailers like Trent, a jeweller operating across price points like Titan to staples players like Nestle, Hindustan Lever and ITC. Incidentally, most of these companies had alluded to challenges to urban demand in recent times. While refraining from populism, the budget has retained its focus on agriculture and the rural economy that should support the positive demand momentum building up from the rural end.

The Budget has addressed challenges to growth, by selecting consumption as its growth engine. But it also succeeded in striking a balance between growth and fiscal prudence. The target to steadily lower fiscal deficit and debt to GDP ratio should be music to the ears of the bond market and could pave the way for a rate cut by RBI sooner than otherwise. The consumption boost, which is positive for loan growth as well as asset quality and the benign outlook on rates should be supportive for banks as well as NBFCs.

Finally, although the reported capex number prima facie appears unexciting compared to the surge seen in the past few years, the budget by no means has compromised on its capex and domestic manufacturing agenda that stands to benefit capex bellwether like L&T or the poster boy of defence – Bharat Electronics.

Overall, we see close to 55 percent of the Nifty index by weight deriving some or the other benefit from the budget, To sum up, Budget 2025 is broadly positive for Nifty earnings in FY26, and should support a gradual earnings recovery in Nifty earnings as the year progresses. Of course, unforeseen global developments could very well throw a spanner in the works.