Budget impact: Top 20 stocks to buy post FM's proposals

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26 Aug, 2025 12:21

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After a lot of volatility, the Nifty ended at a month-high closing level. The 50-share index closed up 57.25 points or 0.6 percent at 8901.85 while the Sensex was up 141.38 points or 0.5 percent at 29361.50. Market experts see it to be a well-balanced Budget and expect it to give some legs to the rally on Monday. Ramesh Damani, Member, BSE also agrees that it may not be a big bang Budget but it seems like a big bold Budget.

However, Ajay Srivastava, CEO of Dimensions Consulting warns that the market may be correcting a little bit definitely in the next seven days or so because there are a lot of expectations built around a couple of sectors that has come down.

Here are 20 stocks to buy recommended by Prabhudas Lilladher.

Auto

Impact: Neutral

Announcement:

• Excise duty slab reworked to 12.5 percent from 12.36 percent
• Hike in customs duty from 10 percent to 40 percent for commercial vehicles (remains at 10 percent for CKD kits)
• Excise duty on chassis for ambulance lowered from 24 percent to 12.5percent
• Focus on electric vehicles

Banks

Impact: Positve

Announcement:

• Distinction between different types of foreign investments particularly foreign portfolio investments and FDI are done away with.
• Agricultural credit targets increased to Rs 8.5 tn vs Rs 8tn in FY15.
• NBFCs having asset size of greater than Rs 5 bn will be allowed to make use of SARFAESI Act, 2002

Capital goods

Impact: Positive

Announcement:

• Allocation to defense increased by 10 percent to 2.4tn, of which plan expenditure up to Rs 946 bn.
• Increase in clean energy cess to Rs 200 per tonne on coal from Rs 100 per tonne and Increase renewable target to 175 GW (100 GW solar, 60GW wind and 15GW other) by 2022
• Increased allocation for roads by Rs 140 bn ( up 45 percent YoY) and Rs 400 bn additional support to road and other infrastructure by converting excise on petrol and diesel in to cess and allowed to raise tax free bonds.
• Increased allocation for railway by Rs 100 bn (up 33 percent Y-o-Y) and allowed to raise tax free bonds

Cement

Impact: Neutral

Announcement

• 50 percent increase in outlay to road sector from Rs300bn to Rs450bn in FY16.
• Increase in surcharge on income tax by 200bps from current 10 percent to 12 percent.

Consumer Products

Impact: Negative

Announcement

• Increase in excise duty by 25 percent on cigarettes below 65mm and by 15 percent for cigarettes above 65mm
• Reduction in tax on royalty and technical fee from 25 percent to 10 percent
• Reduction in excise duty on pair costing over Rs1000 from 12 percent to 6 percent
• Increase in service tax from 12.36 percent to 14 percent

IT

Impact: Positive

Announcement

• Government proposed to reduce corporate tax to 25 percent from 30 percent over the next four years. However, Government of India is likely to do away with exemptions.Removal of Special Additional Duty on IT products.
• Propose to reduce the rates of basic customs duty on certain inputs, raw materials, intermediates and components (in all 22 items) so as to minimise the impact of duty inversion and reduce the manufacturing cost in several sectors.

Pharmaceutical

Impact: Negative

Announcement

• Excise duty: Base rate remains same. No additional benefits for Chemical/Pharma sector
• Customs duty (including cess) increased to 12.5 percent from 12.36 percent

(Posted by Nasrin Sultana)