Budget 2025: Capex stocks drop up to 43% from the last budget. Can government spending do the trick?
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As the countdown to Modi 3.0's Budget 2025 begins, D-Street is pinning its hopes on higher public capital expenditure to fire up the Indian economy. Due to a 7-month spending lull, government spending is expected to fall 15% short of the FY25 budget estimate of Rs 11.1 lakh crore.The impact has shown in India's GDP growth, which fell to a seven-quarter low of 5.4% in Q2FY25. The quarterly earnings of listed companies were also lackluster, with the Nifty universe reporting just a 4% YoY growth in Q2 net profits, followed by rating downgrades. The Street expects the heartbeat index to replicate its single-digit growth in Q3 as well. "The pace of actual capital spending has been poor, and the center is likely to fall 15% short, ending FY25 at Rs 9.5 trillion (lakh crore), flat from the previous fiscal year. While much of this slowdown was attributed to the electoral cycle, the government would be keen to restart the spending mom...