How to Make the Most of the Union Budget 2025: 10 Budget Focused Stocks to Watch Out for

After hitting milestone not long ago, Indian benchmark indices Sensex and Nifty have been clobbered in recent trading sessions.

A mixed bag of high valuations, lower than expected economic growth, currency depreciation and other factors, have led investors to book some profits and cash in on the gains made in the past few years.

Traders and investors are now looking forward to the upcoming Union budget 2025 to save the bulls.

These expectations are somewhat perplexing, as it will be Modi 3.0's first full-fledged budget.

It is evident that should the budget fail to surpass the elevated expectations, disappointment is likely to ensue.

In this article, we'll be looking at sectors that are likely to get maximum attention in the upcoming budget and highlight key stocks positioned to benefit from the policy measures expected to be announced.

From railways and defense to renewable energy and electric vehicles, these budget-focused stocks can drive India's growth story.

RAILWAYS

The Indian Railway Budget 2025 is expected to see Rs 3 trillion allocated for the modernization of India's rail network, including track expansion, 200 Vande Bharat trains by 2025, and the upgrading of stations for smooth travel.

Some other priorities include safety add-ons such as the Kavach collision avoidance system extension. Similarly, high-speed rail projects like the bullet train are to be given a financial boost.

Here are some of the key stocks that could benefit from these budgetary developments:

#1 IRCON International Ltd.

IRCON is a large construction company dealing with railway infrastructure such as tracks, bridges, and electrification. The order book of the company reflects its uninterrupted participation in large projects both within and outside India. The government also seems to emphasize PPPs, which will look for more opportunities for IRCON to take mega infrastructure projects into its strides.

For more details, check out IRCON International's financial factsheet.

#2 Rail Vikas Nigam Ltd. (RVNL)

Having been entrusted with railway projects such as laying down tracks, electrification, and signaling systems, RVNL is well-placed to reap the most business as Indian Railways pursues a massive program to make its tracks more electrified and upgraded to suit high-speed trains. The Union Budget could also look toward providing an impetus for high-speed rail projects that the government visualizes, wherein RVNL's capabilities fit in perfectly. Secondly, RVNL might also find opportunities from "Make in India" policy incentives for the railways equipment and signaling technology.

For more details, check out RVNL's financial factsheet.

#3 HPL Electric & Power Ltd.

HPL Electric is a leader in electrical components, manufacturing products such as meters to switchgears. To top the government focus on railway electrification, HPL is expected to benefit from Indian Railways moving toward 100% electrification.

For more details, check out HPL Electric & Power's financial factsheet.

#4 HBL Power Systems Ltd.

HBL Power is recognized in specific domains such as the niche battery space and power electronics for its presence in the arena of railway signaling, traction systems, and communication networks. A new union budget with much focus on safety could give the electronics house from HBL an order in the signal/safety area that could contribute materially to improving accident and efficiency curves from Indian Railways. The country is all set to modernize its railway infrastructure, which includes communication and signaling systems, where the product range available with HBL would be crucial to bring this transition about.

For more details, check out HBL Power Systems' financial factsheet.

#5 Titagarh Rail Systems Ltd.

Titagarh is a leading manufacturer of freight wagons and passenger coaches. With the budget expected to focus on enhancing the railways' rolling stock, Titagarh is well placed to secure new orders for wagons and coaches. The continued thrust of the government on urban metro projects would also give a significant fillip to Titagarh's demand for metro coaches.

For more details, check out Titagarh Wagons' financial factsheet.

DEFENSE

The Union Budget 2025 will have a huge impact on the defence sector. Going by the momentum built on FY25, wherein the capital outlay for the armed forces jumped 20.3% to an all-time high of Rs 1.72 trillion, the Budget may further accelerate modernisation spending.

Here are some of the key defence stocks for pre-budget gains ahead of Union budget announcements.

#1 Garden Reach Shipbuilders (GRSE)

Garden Reach sits pretty well with an order book of over Rs 250 billion. This Budget is expected to focus more on the naval defence segment, and also on coastal security and maritime defense, and the order book of GRSE is expected to go up. Some of the under-construction projects by GRSE, such as advanced frigates and anti-submarine warfare corvettes, are also aligned with the vision of the government to strengthen the navy.

For more details, check out GRSE's financial factsheet.

#2 Mazagon Dock Shipbuilders Ltd.

Mazagon Dock, the other marquee shipbuilder, is known for producing submarines and warships. The order book currently stands at Rs 400 bn. The projects include stealth frigates and submarines under the P75 program. With spending likely to be planned for the upgrade of the Navy's submarine and development of indigenous warships, the shipbuilding company is expected to see an uptick in new orders. Moreover, the indigenization drive by the government in the defense sector and introduction of sophisticated combat systems may raise the growth potential.

For more details, check out Mazagon Dock Shipbuilders' financial factsheet.

#3 Hindustan Aeronautics Ltd. (HAL)

HAL is a leading player in the aviation and aerospace sector with a significant position in manufacturing fighter jets, helicopters, and other aircraft for the Indian Air Force and Navy. The order book of the company stands at over Rs 900 bn with ongoing production of Tejas fighter jets and advanced helicopters, such as the Light Combat Helicopter (LCH). As a budget for 2025, the Union Budget is likely to focus on bolstering India's air defence capabilities, and this will be gained for HAL from any new orders of indigenous aircraft and aviation systems.

For more details, check out HAL's financial factsheet.

#4 Cochin Shipyard Ltd.

Cochin Shipyard is engaged in shipbuilding and repair for the Navy. Order book of the company is roughly about Rs 220 bn, and it includes the naval support vessels and aircraft carriers. With the government focusing on coastal security and indigenization of naval assets, there is a good chance that Cochin Shipyard will get more orders for advanced naval vessels.

For more details, check out Cochin Shipyard's financial factsheet.

ENERGY

The energy sector will also be one area where the country may concentrate most meaningfully on renewable energy and sustainable power solutions, energy security, etc. Building from last year's Rs 190 bn investment, the number will only grow multifold to supersede the target capacity of renewable energy of 200 GW by which India is sitting today.

This means major funding for solar, wind, and hydro power.

Besides this, dedicated funding support will also be there for green hydrogen. Budget support for smart grid technologies and energy storage will get a boost. This will upgrade the grid and lead to innovative progress for India's greener and sustainable energy future.

These are the stocks that are bound to gain from the announcements that could be made in the budget.

#1 Premier Energies Ltd

Premier Energy is among the future crucial players in the domain of renewable energy, being solar power projects. The expansion drive initiated by the government for solar power generation will benefit Premier Energy through new allocations for large-scale solar installations and also grid-connected projects.

For more details, check out Premier Energies' financial factsheet.

#2 Waaree Energies

The government's emphasis on boosting domestic production of solar panels is something that will work to the advantage of one of the largest solar panel manufacturers worldwide, Waaree Energies. The Union Budget 2025 is expected to include incentives for solar manufacturing under the "Make in India" initiative. Waaree's strong production facilities and growing export market position it to meet increasing demand for solar products both domestically and internationally.

For more details, check out Waaree Energies' financial factsheet.

#3 Indian Renewable Energy Development Agency (IREDA)

IREDA, a public sector financial institution for promoting renewable energy projects, is likely to be the pivot around which the Union Budget's focus on financing clean energy will revolve. This budget has an expectation of higher allotments for renewable energy projects and issuance of green bonds, due to which more requests for lending might be received for IREDA.

For more details, check out IREDA's financial factsheet.

#4 Suzlon Energy

Suzlon, the giant wind energy player will be revived in the hands of the government again with renewed focus on wind energy in clean energy targets. The Union Budget 2025 would include funds for upgrading the wind power infrastructure, it would go a long way in helping Suzlon expand projects at a time when it badly needs it. Suzlon, having years-long experience in making wind turbines, has been associated with state governments, putting it at the forefront for new contracts and projects in the renewable energy space.

For more details, check out Suzlon Energy's financial factsheet.

ETHANOL

Then we have ethanol. The government has planned to go net zero emissions by 2070. Ethanol, sugar sector combined with the electric vehicle sector push will propel the government to reach this target.

Here are stocks that are likely to benefit the most.

#1 Praj Industries

Praj Industries is one of the leading companies providing technology for biofuels, mainly ethanol production. With the government increased focus on ethanol blending, Praj Industries has been placed in a position to substantially benefit from the upscaling in demand for biofuel production technology. The Union Budget 2025 may also announce new subsidies for setting up new ethanol units and financial incentives for technology upgradation, directly impacting Praj's business model.

For more details, check out Praj's financial factsheet.

#2 Balrampur Chini Mills

Balrampur Chini Mills is among the largest sugar manufacturers in India and a prominent ethanol manufacturer. Consequently, higher ethanol blending will drive such companies like Balrampur, which is expanding its distillery capacity to cater to this demand. Subsidy on sugarcane-based ethanol and tax breaks on ethanol producers could also come with the Union Budget 2025.

For more details, check out Balrampur Chini Mills' financial factsheet.

#3 Shree Renuka Sugars

Aggressive government targets on ethanol blending would be favorable to Shree Renuka Sugars, which is one of the largest sugar and ethanol manufacturers. Renuka hopes to scale its distillery and increase ethanol supply with rising demands.

For more details, check out Renuka Sugar's financial factsheet.

ELECTRIC VEHICLES

The Union Budget 2025 could focus on expansion of EV networks, supporting domestic component manufacturing, and rationalizing taxes on EVs, building on previous investments such as the Rs 100 bn allocated for charging infrastructure.

Subsidies under FAME schemes as well as supporting policies for innovative policy support can have this budgeted boost India's entry into electric vehicle transition.

Here are key stocks that could benefit.

#1 JBM Auto

JBM Auto has been aggressive in the electric bus space and has supplied many e-buses to state governments. The budget for 2025 is likely to be focused on public transportation electrification, hence one can expect increased orders for the electric buses from the company. With further policy support for electric public transit, coupled with rising allocations toward green mobility, its prospects are likely to improve. JBM Auto has secured several orders from state transport corporations, which should see an increase in demand after the budget.

For more details, check out JBM's financial factsheet.

#2 Olectra Greentech

Olectra is one of the major players in the electric bus space. With the government continuing its focus on electrifying public transport and setting aside funds for EV infrastructure, the growth trajectory of Olectra seems impressive. Further expansion into battery technology may also find support through new budgetary incentives on domestic battery manufacturing and innovation in EV technology. Olectra has already won contracts for more than 1,500 electric buses and stands a good chance of further orders post-budget.

For more details, check out Olectra Greentech's financial factsheet.

#3 Ola Electric

Ola is leading the electric two-wheeler charge with its popular scooters, and the new budget may just bring in more subsidies and tax cuts for EVs, which can only augur well for Ola's business. The expansion into EV manufacturing is in-line with the focus of the government on domestic production and could be helpful for Ola Electric in getting more incentives to scale further. Ola is the present market leader in electric two-wheelers and looks to expand electric cars in the near future as well.

For more details, check out Ola Electric's financial factsheet.

#4 Mahindra & Mahindra

Mahindra is a leading player in electric SUV and three-wheeler space. The Union 2025 budget, which is expected to increase incentives for manufacturing electric vehicles, is likely to further boost plans by Mahindra to introduce new electric models. The company is also ramping up its electric three-wheeler offerings, which may get a fillip from government schemes aimed at electrifying last-mile delivery and urban transport.

For more details, check out M&M's financial factsheet.

In Conclusion

As India gears up for its next phase of economic growth, these sectors could lead the transformation with robust order books and strategic project wins.

While a strong order book signals potential revenue and profit growth, it's crucial to focus on execution capabilities and profitability. After all, it's not just about winning contracts but delivering them efficiently and sustainably.

As with any investment, maintaining a balanced perspective and keeping an eye on execution remains essential for long-term gains.

Investors should evaluate these companies fundamentals, corporate governance, and valuations of the stocks as key factors when conducting due diligence before making investment decisions.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...