Why Indian Rupee Slides to 87 Per US Dollar For First Time?

On Monday, February 3, the Indian rupee dipped below the 87 per dollar threshold for the first time in history, falling from its previous close of 86.61/$ on January 31. This drop came amid rising global trade tensions following new tariffs imposed by US President Donald Trump on Mexico, Canada, and China.

Tariffs Imposed by US

Trump’s executive orders introduced a 25% tariff on Mexican and most Canadian imports, as well as a 10% tariff on Chinese goods. In response, Mexico and Canada implemented retaliatory measures, while China signalled potential counteractions. The offshore Chinese yuan, which is closely followed by rupee traders, weakened by 0.54% to 7.3585 per dollar, further intensifying pressure on emerging market currencies.

Meanwhile, the US dollar strengthened against major currencies, and US Treasury yields increased. The rupee’s decline mirrored these developments, with traders closely monitoring global market trends for further indications.

Upcoming RBI Monetary Policy

The Reserve Bank of India (RBI) is set to announce its policy decision on Friday, February 7, with expectations of a 25-basis-point rate cut. On January 31, the benchmark 10-year bond yield ended at 6.7001%, slightly lower for the week.

The government has set a lower fiscal deficit target of 4.4% of GDP for FY26, down from 4.8% in the current fiscal year. However, it raised gross borrowing to ₹14.82 lakh crore for the coming year, up from ₹14.01 lakh crore this year.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities market are subject to market risks, read all the related documents carefully before investing.

KPIT Technology Set Feb 04 As Record Date For Interim Dividend

The global technology company KPIT Technology has set Feb 04, 2025, as the record date for its interim dividend for FY25. On January 29, 2025, KPI Tech declared an interim dividend of ₹2.50. The company further stated that the interim dividend be paid within the statutory timelines.

KPIT Tech Record Date: What This Means For Shareholders?

As KPIT Tech has set Feb 04 as the record date for its interim dividend, meaning that Feb 03, marks the last to buy KPIT Tech shares to become eligible for the interim dividend. Further, any shares bought on Feb 04 (record date), won’t be eligible for the interim dividend.

Management Take on KPIT Technology 

Kishor Patil, Co-founder, CEO and MD of KPIT said,” The third quarter revenues are in line with our annual revenue outlook while the operating profit has improved due to revenue mix change and productivity improvement, despite currency headwinds. Thus, we increase our annual EBITDA Margin outlook to 21%+ from 20.5%+ earlier. We are investing in AI technologies fined tuned with automotive-specific data. Our AI philosophy is rooted in developing human-centric, innovative, safe, and responsible AI solutions that drive value creation for our clients. We will leverage these AI investments to augment our talent pool while creating new opportunities for future growth. Our leadership and strength of relationship with our T25 clients is demonstrated by higher deal closures, efficient cash conversion and robust build-up in the pipeline.”

Sachin Tikekar, Co-founder and Joint MD, KPIT said,” We have been developing new sub-verticals viz Trucks and Off-highway. There are sizable opportunities through these investments, and they are now contributing to building our pipeline across the geographies. These will contribute to our growth from the second half of the next financial year. There are new relationships being explored and built with the Passenger Car and Truck makers in China and the Rest of Europe outside Germany. In terms of our new offerings, there is greater interest from our T25 clients in the areas of vehicle cost reduction, cyber security and data-oriented services. Our attrition remains at all-time low levels and our leadership development programs are in full swing to further enhance our continued growth.”

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities market are subject to market risks, read all the related documents carefully before investing.

Mahanagar Gas Shares to Trade Ex-Date on February 03: Interim Dividend of ₹12

On February 03, 2025, Mahanagar Gas shares to trade ex-date, meaning that the shareholders registered in the company’s books will be eligible for the ₹12 interim dividend.

Mahanagar Gas Dividend History

Ex-Date Dividend Type Dividend Amount (₹)
Aug 14, 2024 Final 18.00
Feb 05, 2024 Interim 12.00
Aug 14, 2023 Final 16.00

Mahanagar Gas Operational Highlight 

As of December 31, 2024, the company is the sole authorised distributor of CNG and PNG in Mumbai, Thane urban including adjoining areas and Raigad with more than 25 years of consistent growth. MGL secured the availability of domestically produced APM, HPHT and term RLNG at applicable prices for catering to CNG and Household (DPNG) customers and through term contracts for other customers.

Looking forward, the company is seeking growth opportunities through digitisation initiatives to improve customer experience, reduce project timelines and increase operational efficiency and run various schemes/loyalty programs, inorganic CGD expansion.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Great Eastern Shipping Shares to Trade Ex-Date on February 03: Interim Dividend of ₹8.10

On February 03, 2025, Great Eastern Shipping shares to trade ex-date, meaning that the shareholders registered in the company’s books will be eligible for the ₹8.10 interim dividend.

Great Eastern Shipping Dividend History

Ex-Date Dividend Type Dividend Amount (₹)
Nov 19, 2024 Interim 7.20
Aug 13, 2024 Interim 9.00
May 22, 2024 Interim 10.80

Great Eastern Shipping Q3FY25 Highlight 

During Q3FY25, Great Eastern Shipping Company Ltd reported a total income of ₹1,500.77 crores, marking a 5.0% decrease from ₹1,579.76 crores in Q2FY25. However, the company’s profitability in Q3FY25 was strong, with a Profit After Tax (PAT) of ₹593.66 crores, reflecting a 3.1% increase from ₹575.57 crores in Q2FY25, and a 10.3% rise compared to ₹538.17 crores in Q3FY24.

The overall weak oil market sentiment that persisted throughout the year continued into Q3FY25, driven by lower global demand (particularly in China), ongoing OPEC+ production cuts (extended in early December), and reduced refinery throughput. Additionally, disruptions in the Red Sea caused a significant decline in both East-West and West-East trade routes for Crude & Products.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Best Liquor Stocks For Feb 2025: Tilaknagar Industries, United Spirits and More- Based on 5Y CAGR

India is one of the fastest-growing and most diverse markets for alcoholic beverages in the world. The sector has significant growth potential, driven by favourable demographics and increasing social acceptance. In recent years, the alcoholic beverage industry in India has seen impressive growth, fueled by factors like rapid urbanisation, shifting consumer preferences, a youthful population, a rising middle class with higher purchasing power, and a growing demand for premium alcoholic drinks. In this blog, we will look at the best liquor stocks for Feb 2025 based on different parameters.

Best Liquor Stock Based on 5Y CAGR

Company Name Market Cap (In ₹ Crore) 5Y CAGR (%)
Tilaknagar Industries Ltd 7,174.14 82.01
Globus Spirits Ltd 2,365.95 43.06
Radico Khaitan Ltd 28,825.15 41.14
Som Distilleries and Breweries Ltd 2,050.13 36.81
United Spirits Ltd 1,03,862.07 17.60

Note: The stocks have been sorted based on 5Y CAGR and as of January 30, 2024

Overview of 5 Best Liquor Stocks

1. Tilaknagar Industries Ltd

Tilaknagar Industries Ltd. is mainly involved in the manufacturing and sale of Indian Made Foreign Liquor (IMFL). The Company sells over 15 different brands of brandy, whisky, gin, rum, and vodka. During Q2 FY25, the company delivered its highest-ever EBITDA of ₹66 crore. The company’s margins expanded on the back of superior brand mix as well as cost optimization initiatives. All this despite subdued volume growth on account of the transitioning of RTM in its key state of Andhra Pradesh (AP) in Q2.

Key Metrics:

  • Return on Equity (ROE): 24.6%
  • Return on Capital Employed (ROCE): 22%

2. Globus Spirits Limited 

Globus Spirits Limited is involved in the manufacturing and sale of Indian Made Indian Liquor (IMIL). The company operates a current portfolio of 11 brands across Whisky, Gin, Vodka and Rum segments. It believes that profitability to improve with volume growth on the back of Same State Growth and New State Growth.

Key Metrics:

  • ROE: 10.4%
  • ROCE: 9.56%

3. Radico Khaitan Ltd

Radico Khaitan is one of the most recognised IMFLs. It was formerly known as Rampur Distillery Company and was focused on distillation and bottling for branded players and canteen stores of the armed forces. Radico Khaitan achieved industry-leading IMFL volume growth of 15.3% year-over-year in Q3 FY25. The company anticipate this strong momentum to continue in the near term.

Key Metrics:

  • ROE: 11.3%
  • ROCE: 13.2%

4. Som Distilleries & Breweries Ltd

Som Distilleries & Breweries Ltd. is one of the leading alcoholic beverages manufacturers in India involved in the manufacturing and sale of Beer and Indian Made Foreign Liquor (IMFL). The company’s overall beer capacity has increased from 30.2 to 35.2 million cases in Q3FY25 After the completion of the recent expansion in April 2024.

 Key Metrics:

  • ROE: 18.4%
  • ROCE: 19.4%

5. United Spirits Ltd 

United Spirits Ltd.(USL) is one of the leading beverage alcohol companies and a subsidiary of global leader Diageo PLC. It manufactures, sells, and distributes a wide portfolio of premium brands. During Q2 FY25, the company recorded a marginal rise in the profit after tax (PAT) to ₹341 crore against ₹339 crore reported in Q2 FY24. The company’s revenue from operations also witnessed a fall of ~1%.

Key Metrics:

  • ROE: 21%
  • ROCE: 27.9%

Best Liquor Stock Based on Net Margin

Company Name Market Cap (In ₹ Crore) Net Margin (%)
Sula Vineyards Ltd 2,944.63 16.22
United Spirits Ltd 1,03,862.07 12.16
Tilaknagar Industries Ltd 7,174.14 9.80
Som Distilleries and Breweries Ltd 2,050.13 6.72
Associated Alcohols & Breweries Ltd 2,046.38 6.59

Note: The stocks have been sorted based on 5Y CAGR and as of January 30, 2024

Best Liquor Stock Based on Debt to Equity

Company Name Market Cap (In ₹ Crore) Debt to Equity (x)
United Breweries Ltd 2,944.63 2.05
United Spirits Ltd 1,03,862.07 0.59
Tilaknagar Industries Ltd 7,174.14 0.34
Associated Alcohols & Breweries Ltd 2,046.38 0.34
Som Distilleries and Breweries Ltd 2,050.13 0.28

Note: The stocks have been sorted based on 5Y CAGR and as of January 30, 2024

What are Liquor Stocks?

Liquor stocks refer to shares of companies that are involved in the production, distribution, or retail of alcoholic beverages. These can include businesses that produce spirits, beer, wine, or other alcoholic drinks. Companies in this sector might be large multinational corporations, smaller craft breweries or distilleries, or retailers who sell these products. Investing in liquor stocks allows individuals to own a piece of these companies and potentially benefit from their profits, especially as the demand for alcohol continues to grow in various markets.

Alcoholic Beverages Industry in India

India’s alcohol industry is projected to reach a value of US$ 55,840 million by 2024, with sales expected to grow at a 7.2% CAGR throughout the forecast period, reaching US$ 112,338.9 million by 2034. The growing demand for premium and imported brands, alongside the rising popularity of craft spirits and microbreweries, is anticipated to drive the expansion of the sector. Furthermore, the increasing appeal of experiential drinking venues that cater to diverse consumer preferences is expected to further boost alcohol sales in the country.

Conclusion

Investing in liquor stocks presents considerable opportunities, especially as the industry thrives on increasing consumer demand, the shift toward premium products, and the emergence of new drinking experiences. However, potential investors should be mindful of the volatility that can come with this sector.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities market are subject to market risks, read all the related documents carefully before investing.

Weekly Market Recap: Nifty, Sensex Posted Mixed Performance During Budget 2025 Week Ended Feb 1

The 6-day week ended February 1, 2025, saw a mixed reaction in the Indian securities market. The benchmark indices NSE Nifty 50 and BSE Sensex started the week with steep selling pressure, with a fall of over 1% on January 27, 2025, respectively. For the consecutive 4 days, Bulls took over the bear and the market rebounded and gained over 2%. The week closed mixed on Union Budget 2025 day with Nifty 50 falling 0.11% to 23,482.15 and Sensex closing flat at 77,505.96 with a positive bias of 0.01%

Key Highlights of Union Budget 2025

On February 1, 2025, FM Nirmala Sitharaman presented her 8th consecutive budget speech. Below are key highlights of the speech

  • The total receipts, excluding borrowings, are estimated at ₹34.96 lakh crore, while the total expenditure is projected at ₹50.65 lakh crore. Net tax receipts are expected to be ₹28.37 lakh crore. The fiscal deficit is anticipated to be 4.4% of GDP. Gross market borrowings are estimated at ₹14.82 lakh crore.
  • A Makhana Board will be set up to enhance the production, processing, value addition, and marketing of makhana.
  • A provision of ₹1.5 lakh crore has been proposed for 50-year interest-free loans to states for capital expenditure and reform incentives.
  • Under the new tax regime, no personal income tax will be levied on incomes up to ₹12 lakh (which equals an average monthly income of ₹1 lakh, excluding special income like capital gains). For salaried taxpayers, this limit will be ₹12.75 lakh due to a standard deduction of ₹75,000. This new structure is expected to significantly lower taxes for the middle class, thereby increasing disposable income and encouraging household consumption, savings, and investment.

New Debutant on D-Street

On Jan 29, 2025, ITC Hotels Limited and Denta Water and Infra Solutions Limited debuted on BSE and NSE.

Major Q3FY25 Earnings This Week

  • During Q3FY25, Coal India reported a slight decline of ₹434 crore or 1% in the total income to ₹37,923 crore as compared to ₹38,357 crore in Q3 FY24.
  • TATA Steel posted a 36.37% YoY drop in consolidated net profit to ₹326.64 crore for Q3FY25, down from ₹513.37 crore in the same period last year.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities market are subject to market risks, read all the related documents carefully before investing.

Union Budget 2025: Power Sector Received ₹1,500 Crore for Solar Power Grid

In the Union Budget 2025, announced on February 1, the Indian government allocated ₹1,500 crore to the solar power grid segment, further solidifying its commitment to a renewable energy future. This allocation marks a continuing trend of increasing financial support for solar power, building on the ₹8,000 crore allocation from last year, a significant rise from ₹4,757 crore in the revised estimates for FY23-24.

India’s solar energy sector has seen remarkable growth in recent years, reflecting the country’s strong push for sustainable development and energy security. In the fiscal year 2022-23, the allocation reached ₹3,304.03 crore, setting a new high compared to ₹2,369.13 crore in 2021-22.

India’s Solar Power Journey

The growth of India’s solar power sector is no accident. The government has launched several initiatives aimed at accelerating solar energy adoption across the nation. Key schemes like the Solar Parks, Viability Gap Funding (VGF), the Central Public Sector Undertaking (CPSU) scheme, the Defence scheme, Canal Bank and Canal Top schemes, the Bundling Scheme, and the Grid-Connected Solar Rooftop Scheme have played vital roles in boosting the sector.

Solar Park Scheme

One of the government’s primary initiatives is the development of solar parks, which are large-scale projects designed to facilitate solar power generation across the country. The National Solar Mission supports these parks, which provide developers with ready-made infrastructure, thus reducing the cost and time required to set up solar plants. This has been a key factor in driving the rapid growth of solar energy capacity in India.

Viability Gap Funding (VGF)

The VGF scheme has helped bridge the financial gap between the actual cost of solar projects and what is commercially viable. By offering financial support to developers, this scheme makes it easier for them to secure funding and bring solar projects to fruition. This, in turn, has helped India expand its solar power generation capacity.

Central Public Sector Undertaking (CPSU) Scheme

Under the CPSU scheme, public sector companies set up large-scale solar power projects. This initiative has been a crucial part of India’s renewable energy targets, contributing significantly to the country’s solar capacity and helping meet ambitious energy goals.

Conclusion

Thanks to these initiatives and the government’s forward-thinking policies, India has made remarkable strides in solar energy. In fact, India has recently overtaken Japan to become the world’s third-largest solar power producer. This milestone highlights the country’s commitment to leading the renewable energy transition on a global scale.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Union Budget 2025: FM Allocated ₹11.21 lakh Crore for Capital Expenditure

On February 1, 2025, FM Nirmala Sitharaman allocated ₹11.21 lakh crore for capital expenditure (capex), in Union Budget 2025. This indicates the government’s focus on infrastructure-driven growth. This allocation represents a 0.9% increase from the capex allocation in FY25. The government’s projected effective capital expenditure for FY26, which includes both the Centre and states, is ₹15.48 lakh crore.

The revised estimate (RE) for FY25 has been lowered to ₹13.18 lakh crore, down from the budget estimate (BE) of ₹15.01 lakh crore.

Previous Budget Allocation

In Budget 2024, Finance Minister Nirmala Sitharaman allocated ₹11.11 lakh crore for capex, maintaining the same level as the interim budget presented in February. This allocation accounted for 3.4% of GDP. During the Union Budget 2025-26, the revised capex for FY25 was reduced to ₹10.18 lakh crore. The revised estimate for FY24 capex stood at ₹9.50 lakh crore, lower than the previous estimate of ₹10 lakh crore. For FY23, the revised capex was ₹7.28 lakh crore.

Support for State Infrastructure 

The government also extended ₹1.5 lakh crore in interest-free loans to states to support their infrastructure priorities. Private sector investment in infrastructure was further encouraged through viability gap funding (VGF) and supportive policies. The government focused on balancing fiscal prudence with growth-oriented spending in the Budget, aiming to boost disposable income and strengthen public-private investments.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Best Fertiliser Stocks For February 2025 – Based on 5Y CAGR: RCF, Deepak Fertilisers and More

Fertilisers play a crucial role in helping farmers produce the crops necessary to meet the demand. With this in mind, fertilizer stocks represent an intriguing opportunity for investors looking to capitalize on a growing industry with a direct impact on global food security. In this article, let’s look at some of the best fertiliser stocks in India for February 2025 based on different parameters.

Best Fertiliser Stocks In India Based on 5Y CAGR 

Name Market Cap (₹ in crore) 5Y CAGR (%)
Fertilizers and Chemicals Travancore Ltd 57,654.11 79.21
Deepak Fertilisers and Petrochemicals Corp Ltd 14,150.00 59.00
Coromandel International Ltd 53,722.85 24.05
Rashtriya Chemicals and Fertilisers Ltd 8,707.29 23.38
Gujarat Narmada Valley Fertilizers & Chemicals Limited 8,017.08 22.91

Note: The best fertiliser stocks for Feb 2025 are sorted based on 5YCAGR as of January 31, 2025. 

Overview of Best Fertiliser Stocks 

1. Fertilizers & Chemicals Travancore Ltd

Fertilisers & Chemicals Travancore Ltd (FACT) is engaged in the manufacturing and selling of fertilizers, its by-products and Caprolactam. The company produces a wide range of fertilisers like Complex fertilisers (Factamfos), Straight fertilisers (Ammonium Sulphate), Organic fertilisers, Biofertilisers and Imported fertilisers (Muriate of Potash).

Key metrics: 

  • Return on equity (ROE): 29.4%
  • Return on Capital Employed (ROCE): 16.9

2. Deepak Fertilisers and Petrochemicals Corporation Ltd

Deepak Fertilisers and Petrochemicals Corporation Ltd is in the business of fertilisers, agri services, bulk chemicals, mining chemicals and real estate. During Q3FY25, the company reported a remarkable 72% increase in EBITDA to ₹486 crore. CNB business continue to out-perform, revenue up by 55% YOY, driven by good monsoon and execution of crop focus value added strategy

Key metrics: 

  • ROE: 7.67%
  • ROCE: 10.7%

3. Coromandel International Ltd

Coromandel International offers a diverse range of products and services across the farming value chain. It specializes in fertilizers, crop protein, bio pesticide, specialty nutrients, organic fertilizers, etc. The company reported robust performance in Q3 FY25, backed by strong sales volumes in Nutrients and crop protection segments, operational excellence across businesses and continued execution of its strategic initiatives.

Key metrics: 

  • ROE:18.99%
  • ROCE: 26%

4. Rashtriya Chemicals & Fertilisers Ltd

Rashtriya Chemicals & Fertilizers is a public sector undertaking (PSU) engaged in manufacturing and marketing of fertilizers and industrial chemicals. RCF manufactures Urea, Complex Fertilizers, Biofertilizers, Micro-nutrients, 100 per cent water soluble fertilizers, soil conditioners and a wide range of Industrial Chemicals

Key metrics: 

  • ROE: 4.20%
  • ROCE: 6.16%

5. Gujarat Narmada Valley Fertilizers & Chemicals Limited

Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC) operates mainly in the Industrial Chemicals, Fertilizers apart from the small presence of IT services. During 1HFY25 revenue is adversely affected due to prolonged maintenance shutdown of TDI – Dahej plant resulting into lower volume

Key metrics: 

  • ROE: 5.63%
  • ROCE: 7.71%

Best Fertiliser Stocks In India Based on 5Y CAGR 

Name Market Cap (₹ in crore) 5Y CAGR (%)
Bayer Cropscience Ltd 22,930.58 14.28
Coromandel International Ltd 53,722.85 7.37
Chambal Fertilisers and Chemicals Limited 19,792.22 6.97
Gujarat Narmada Valley Fertilizers & Chemicals Limited 8,017.08 5.92
Gujarat State Fertilizers & Chemicals Limited 8,079.93 5.91

Note: The best fertiliser stocks for Feb 2025 are sorted based on 5YCAGR as of January 31, 2025. 

Overview of the Fertiliser Industry

The Indian fertilizer industry is set for significant growth, with the market projected to reach ₹1.38 lakh crore by 2032, growing at a Compound Annual Growth Rate (CAGR) of 4.2% from 2024 to 2032. This underscores the sector’s vital role in boosting India’s agricultural output and ensuring food security.

In 2023, the market size was ₹94,210 crore, fueled by increasing agricultural demands and proactive government measures. Fertilizer production in FY24 reached 45.2 million tonnes, reflecting the success of the Ministry of Fertilizers’ policies. As the world’s second-largest producer of fruits and vegetables, after China, India’s agricultural prominence further drives the industry’s growth.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Union Budget 2025: Will It Impact Stock Market?

The Union Budget is one of the most closely watched events in India’s economic calendar. It has a significant influence on the country’s financial landscape, often sparking dramatic fluctuations in the stock market. Investors, analysts, and businesses eagerly await the government’s proposed measures to better understand how they might affect different sectors of the economy. With Finance Minister Nirmala Sitharaman set to present the Union Budget on February 1, 2025, the anticipation is higher than ever. This year, the stock markets will also remain open on Saturday—a rare occurrence.

As Budget Day approaches, let’s take a closer look at how it can influence the stock market and why it matters for investors.

Role of the Budget in Promoting Economic Growth

One of the primary objectives of any Union Budget is to stimulate economic growth. When the government announces measures designed to boost the economy, the stock market typically reacts positively. Initiatives such as tax cuts, increased infrastructure investments, or incentives for businesses can all have a direct impact on market sentiment. These measures can boost investor confidence, leading to a rise in stock prices as markets expect stronger economic performance.

Putting More Money in People’s Hands

The Budget also has the power to put more money into people’s pockets, which, in turn, can stimulate spending. Tax reductions, direct income transfers, and measures to control inflation can all help increase disposable income. When people have more to spend, businesses benefit, particularly in sectors such as retail, automobiles, and consumer goods. As these sectors perform better, the stock prices of companies within them tend to rise, which can have a positive knock-on effect on the overall market.

Impact of Taxation Changes

Taxation changes are one of the most significant aspects of the Union Budget. The government may introduce tax cuts, which generally increase disposable income and corporate profits. This tends to encourage more investments, driving up stock prices. Conversely, an increase in taxes could reduce consumer spending and corporate profitability, which can negatively affect market sentiment.

The Budget also often impacts taxes on stock market profits—such as capital gains taxes and dividend taxes. Lower taxes on these profits can make investing in the stock market more attractive, encouraging more capital inflows and boosting stock prices. However, an increase in capital gains or dividend taxes could dampen investor enthusiasm and result in lower stock prices.

Historical Union Budget Reaction on the Stock Market 

Union Budget 2024

The Union Budget for 2024, which was the interim budget 2024, presented on February 1, created ripples in the financial markets. The stock markets initially saw a decline after the government proposed raising taxes on capital gains and trading derivatives. Both the NSE Nifty 50 and S&P BSE Sensex experienced a drop of around 1%.

Union Budget 2023

The Union Budget for 2023, also presented by Finance Minister Nirmala Sitharaman on February 1, aimed at strengthening public finances and the financial sector. The stock market reacted with a mix of optimism and caution. During intraday trade, the Sensex surged by over 1,100 points but ultimately closed just 158.18 points higher at 59,708.08. In contrast, the Nifty 50 fell by 45.85 points, closing at 17,616.30.

Conclusion

The Union Budget remains a cornerstone event in India’s economic year, and as February 1 draws near, the market’s volatility will continue to reflect the public’s and investors’ expectations about the government’s fiscal policies. Whether you’re an individual investor, a business owner, or a financial analyst, keeping an eye on the Union Budget’s impact is essential for navigating the ever-changing landscape of the Indian stock market.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.