Indian Economy on an Upward Trajectory: Upcoming Budget and Trump 2.0 Crucial for Market Gains
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New Delhi, Jan 13 (NationPress) As food inflation has reached its peak and with government efforts to enhance capital expenditure (capex), the Indian economy is witnessing steady growth. The upcoming Union Budget and Donald Trump 2.0 are critical factors for market returns, according to a report published on Monday.
There is a sustained recovery in rural demand, with the festival and wedding seasons boosting demand for travel, jewelry, watches, quick service restaurants (QSR), footwear, apparel, and durable goods, as highlighted in the report by PL Capital Group - Prabhudas Lilladher.
“We are already observing an increase in ordering momentum in sectors like Railways, Defense, Power, and Data Centers. The execution of these projects will enhance growth in FY26 and beyond,” stated Amnish Aggarwal, Director of Institutional Research.
“We anticipate a growth-focused budget aimed at stimulating the economy and encouraging the middle class to boost spending,” he added.
The capex story in India, alongside discretionary consumption and financialization, represents key themes for potential long-term gains.
Retail is on the brink of significant transformation as quick commerce alters the landscape not just for groceries but also for various discretionary segments.
“We believe that the expansion of quick commerce into the discretionary sector and food services could lead to short-term disruptions in these areas and affect profitability,” the report indicated.
The cement industry is expected to show improved growth and profitability, driven by a revival in construction activities and anticipated price increases. Meanwhile, the steel sector will hinge on import duties and trends in global prices, as per the report.
Ordering momentum and execution in capital goods and defense are projected to improve in the forthcoming quarters.
“The budget will be crucial for the sustainability of capex, especially considering the likely shortfall in target spending for FY25. However, themes such as Defense, Power, Data Centers, railways, and energy transition remain strong,” the report observed.
As we approach 2025, the agricultural sector appears poised for a fruitful Rabi crop, with normal weather patterns expected to help reduce inflation to between 4.3-4.7 percent in FY26.
Increased crop yields and a rise in construction and factory activity, coupled with moderating inflation, are likely to boost demand towards the end of Q4 FY25, according to the report.
