Budget 2025 expectations: The Union Budget 2024 saw finance minister Nirmala Sitharaman keeping infrastructure spending for key central ministries unchanged from provisions of the Interim Budget 2024.

In Interim Budget announced on February 1, 2024, Sitharaman had announced a 16.9 per cent hike in capital expenditure to Rs 11.11 trillion. However, hike in capex for railways and road transport and highways, and housing was moderate.

The effective capex for the financial year stood at Rs 15 trillion, which includes close to Rs 3.9 trillion of grants to states for infrastructure creation.

With 10 days ahead of Budget 2025 to be announced on February 1, Axis Securities has come out with its expectations from the infra sector. 

The brokerage said it expects a rise in infrastructure capital outlay in the Union Budget 2025-26. It expects the capital outlay on the infrastructure sector to witness increment in the Union Budget 2025-26 to achieve the targets set under the National Infrastructure Pipeline and Gati Shakti Master Plan. 

The government is expected to focus on key infrastructure segments such as roads, railways, airports, and urban infrastructure. With the government focusing on expanding the road network, a 10%-15% higher allocation YoY for the Ministry of Road Transport & Highways is expected. On similar lines, railways should also witness a higher budgetary allocation in 2025-26. 

Axis also said dedicated allocation to larger infrastructure projects like Jal Jeevan Mission, High-Speed Rail, Smart Cities, and Inland Waterways Development is expected, supporting the broader objectives of the National Infrastructure Pipeline (NIP).

The government is also expected to improving long-term funding availability, said the brokerage. More measures to improve long-term funding availability for the infrastructure sector are expected, it said. 

The brokerage also expects continued investment in the transmission sector and an increased focus on improving the distribution sector. 

It expects the Budget to have a positive impact on the infra sector. 

“With the heightened government focus on developing the overall infrastructure of the country, particularly in highways, railways, and urban infrastructure, companies operating in these segments are poised to encounter massive opportunities, said the brokerage. It is positive on stocks such as H.G Infra, RITES, KPIL, KEC International, J Kumar Infraprojects and Ahluwalia Contracts.