New Delhi: With food inflation having peaked out and the government trying to accelerate capex spending, the Indian economy is growing steadily. According to a report on Monday, the upcoming Union Budget and Donald Trump 2.0 hold the key to market returns.
Rural demand is showing a sustained recovery. According to the report by PL Capital Group—Prabhudas Lilladher, the festival and wedding season has provided a boost to demand for travel, jewellery, watches, quick-service restaurants (QSR), footwear, apparel, and durables.
“We are already witnessing uptick in ordering momentum in Railways, Defense, Power, Data centres etc. the execution of which will accelerate growth in FY26 and beyond,” said Amnish Aggarwal, Director, Institutional Research.
“We expect a growth-oriented budget with an attempt to pump prime the economy and incentivise the middle class to increase spending,” he added.
India’s capex story, discretionary consumption and financialisation are some of the key themes to play for long-term gains.
Retail is on the verge of big transformation as quick commerce is changing the dynamics of not only grocery but also other discretionary segments.
“We believe the extension of quick commerce in the discretionary segment and food services can create near-term disruptions in respective segments and impact profitability,” the report mentioned.
Cement should show better growth and profitability, led by the revival of construction activity and expected price hikes. Steel industry fortunes depend upon import duty and trends in global prices, according to the report.
Capital goods and defence should see improved ordering momentum and execution in the coming quarters.
“Budget will hold key to sustainability of capex given likely miss in target spending in FY25. However, Defence, Power, Data Centers, railways and energy transition remain potent themes,” the report noted.
As we enter and navigate through 2025, agriculture seems to be heading for a good Rabi crop, and normal weather patterns should help cool down inflation to 4.3-4.7 percent in FY26.
Higher crop output and increase in construction/factory activity and moderating inflation should bolster demand from fag end of Q4 FY25, said the report.
–IANS
