budget impact on markets: Infrastructure stocks mixed as Budget lives up to Dalal Street expectations


MUMBAI – Stocks in the infrastructure space were mixed, with most of them largely unmoved as the announcements in the interim Budget for FY25 were largely on expected lines.

For 2024-25 (April-March), the government has increased the total capital outlay by 11% to Rs 11.1 lakh crore, which was largely expected. This is likely to be 3.4% of GDP.

Analysts had expected government capex to further increase by 10-15% for FY25. In FY24, the government had pegged a capex target of Rs 10 lakh crore.

Of the total outlay for FY25, the government has allocated Rs 2.78 lakh crore for the road transport and highways ministry, and Rs 2.55 lakh crore for railways.

“Though interim, the Budget 2024 looks to be a continual blueprint for the nation to become the 3rd largest economy of the world through continued focus on enhanced capex outlay by 11.1% to Rs.11.1 lakh crore. The focused push to infrastructure through enhanced capex to spur growth is noteworthy and, hence, applaudable,” said Virendra D Mhaiskar, chairman and managing director of IRB Infrastructure Developers.

Shares of L&T, GMR Airports, Adani Enterprises, Dilip Buildcon, and PNC Infratech were down 0.3-2%. On the contrary, IRB Infrastructure, HG Infra Engineering, GR Infrastructure Projects, and NBCC India rose 1-3%. For railways, the government said 40,000 rail bogies will be transformed to Vande Bharat standards and also proposed three rail connectivity corridors under the PM Gati Shakti plan. This is expected to improve passenger train operations across the country. Metro connectivity and Namo Bharat schemes have been proposed to expand to more cities during the next fiscal year.

On the aviation front, the expansion of existing airports and the development of new airports will continue expeditiously, the government said.

“The Finance Minister announced a modest 11.1% increase in India’s infrastructure spending, aligning closely with the nominal growth estimate. However, to address the challenges of deteriorating infrastructure, India must consider a more substantial increase in investment rather than a reduction,” said Pradeep Gupta, co-founder & vice-chairman of Anand Rathi Group.

To push private capex, the government lowered its market borrowing programme for the next fiscal year.

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