BUSINESS

Budget Boosts Consumption Sectors : Union Budget to Enhance Consumption Sectors; DeekSeek AI Presents Prospects for Indian IT Firms

Union Budget to Enhance Consumption Sectors; DeekSeek AI Presents Prospects for Indian IT Firms
Bengaluru, Feb 5 (NationPress) The Union Budget is anticipated to enhance the consumption sector, with long-term policies benefiting urban housing, insurance, and defense industries, according to a recent report.

Synopsis

The Union Budget is poised to strengthen the consumption sector, with favorable long-term strategies for urban housing, insurance, and defense industries. Additionally, opportunities in AI and various sectors like tourism and EVs may emerge as significant growth areas.

Key Takeaways

  • Union Budget aims to enhance the consumption sector.
  • Long-term policies favor urban housing, insurance, and defense.
  • Capex budget expected to exceed $1.2 trillion by 2030.
  • DeepSeek AI expands the IT market for Indian firms.
  • Tourism and EVs present new opportunities.

Bengaluru, Feb 5 (NationPress) The Union Budget is set to enhance the consumption sector, while long-term policies are advantageous for urban housing, insurance, and defense-related industries, as per a recent report.

The capital expenditure (capex) budget has increased by 15 percent CAGR over the last decade, and the allocation until 2030 is anticipated to surpass $1.2 trillion, according to managers at smallcase, a prominent provider of investment products and platforms within the Indian capital markets.

They believe that substantial capex investments will likely benefit banks and specialized infrastructure NBFCs.

“While numerous consumption-focused firms are currently overvalued, consumer finance companies are available at relatively more reasonable valuations,” the report stated.

Regarding DeepSeek AI, smallcase managers noted that it has broadened the market for IT, although short-term growth rates and valuations raise concerns.

The IT sector remains an appealing opportunity, with DeepSeek catalyzing an exceptionally large TAM (total addressable market) for Indian IT service providers.

As the cost of training new AI models has decreased to between 1/30th and 1/50th of previous levels, it enables small and mid-sized businesses and startups to devise new models and launch numerous AI-based products over the next 2-10 years.

This significantly expands the market for Indian IT services. However, with some uncertainty surrounding near-term growth rates and slightly elevated valuations, IT remains a potentially alpha-generating sector, according to the report.

Additionally, electric vehicles and other modes of mobility could offer intriguing opportunities. The tourism sector, particularly religious tourism, may also benefit from tax incentives and budgetary focus.

“The toy industry represents a $400 billion global market, with substantial manufacturing occurring in China. The budget has earmarked funds for the toy manufacturing sector, potentially leading to significant growth over the next 10-15 years,” remarked Ambareesh Baliga, a seasoned market expert and smallcase manager.

At a macroeconomic level, “we require the economy to grow at over 7.5-8 percent for sustainable long-term growth of the market and currency,” he added.

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