Stocks across auto, FMCG, healthcare stand to gain from Union Budget 2025

Stocks across auto, FMCG, healthcare stand to gain from Budget; Dabur, Maruti, Apollo Hospitals, Bajaj Finance in focus

The Union Budget has set the tone for an economy focused on boosting consumption, improving financial inclusion, and supporting MSMEs, agriculture, and rural prosperity.

The overall union budget focused on consumption boost and leaned on private capex to pick up, says Utsav Verma, Head of Research at Institutional Equities. Here’s a look at some the stocks that experts believe are worth investing post the Budget:

Dabur: The FMCG player had earlier this week reported muted earnings for the quarter ended December 31, 2024. While the brokerages trimmed their target prices, it was mainly due to subdued urban demand. Therefore, the current consumption boost from the Budget measures is likely to lead an upward trend in the stock prices and company’s growth charts.

Maruti Suzuki India: CLSA had raised its target price (to Rs 13,446/share from Rs 12,631/share) on the stock, with an outperform call, due to continued demand For CNG-powered cars which is further expected to grow. Maruti Suzuki is a key beneficiary of the government’s latest initiatives to boost EV adoption, as it is set to launch its maiden electric vehicle in 2025.

TVS Motors: The 2W industry demand is recovering strongly in the initial three weeks of January 2025 and is further expected to grow in double digits by end of FY25. Combined with other innovations/cost reduction measures in the budget announcement, EV profitability will improve, leveraging benefits to TVS Motors. Utsav Verma, Head of Research - Institutional Equities, calls out TVS Motors to be among his keenly watched out stocks.

Apollo Hospitals: The government's focus on medical tourism will certainly benefit private hospitals. “The government does not intend to build more hospitals, which means the private healthcare sector will continue to thrive,” said Saurabh Mukherjea, founder and chief investment officer at Marcellus Investment Managers.

Fortis Healthcare: Besides the Budget announcements that will benefit the healthcare major, Jefferies in a report highlighted a favourable outlook for the company, on the back of a positive wave in terms of market performance, following volume driven growth and brownfield bed expansion.

Bajaj Finance: The enhanced credit guarantees and higher classification thresholds announced in the Budget will provide small businesses with greater financial flexibility to scale. NBFCs and HFCs will be pivotal in bridging credit gaps and ensuring financial inclusion for MSMEs. As per Motilal Oswal Securities’, the company’s partnership with Bharti Airtel has the potential to become huge over the medium term, given there are around 200 million non-overlapping Airtel customers.

Market sentiments revealed the Union Budget 2025 announcements felt more of a substantial relief to the middle class (specifically by raising the nil tax slab from Rs 7 lakh to Rs 12 lakh). Thus, unlocking higher disposable incomes, says Ajit Mishra, SVP of Research at Religare Broking.

Gaurav Dua, SVP & Head – Capital Markets Strategy at Mirae Asset Sharekhan, adds to this outlook saying that the year 2025 is likely to see a correction in broader markets (SMID space) and sector rotation in favor of IT Services, Pharma, FMCG, and select banks. Focus is on IT, Pharma, and FMCG. Caution is advised for sectors that rely on heavy government capex, as infrastructure spending has been reduced.