What to do with Defence, Railway stocks? Which sectors are best/worst bets post-Budget?

Uncertain about entering the stock market amid global turmoil, a falling rupee, and Budget 2025? ETMarkets spoke to Aamar Deo Singh, Senior VP of Research at Angel One, to explore the best strategies for investing and trading.

Excerpts:

What is your take on the overall budget in terms of equity markets, economy, and other key aspects?Aamar Deo Singh: The budget takes a holistic approach to address multiple challenges, especially considering global economic uncertainties. India remains one of the fastest-growing economies, and the government has made efforts to support growth.

One of the major highlights is the personal income tax relief, which is a bold move, with the government forgoing nearly ₹1 lakh crore in revenue. This is expected to boost consumption, as taxpayers will have additional spending power, creating a multiplier effect on the economy.

The budget also focuses on key sectors like agriculture (Dhan Dhanya Scheme), MSMEs (credit and relaxation measures), and insurance (100% FDI approval). The capex outlay has been increased to ₹11.2 lakh crore, signaling the government’s commitment to infrastructure growth.However, fiscal deficit control remains a priority, with a target of 4.8% this year and 4.4% next year. While some relaxation could have been beneficial for capital infusion, private sector participation remains crucial.

Additionally, the government’s “Heal in India” initiative promotes medical tourism, and there’s a strong emphasis on ease of doing business, shipbuilding, energy, nuclear power, and textiles. These measures are positive, but execution will be key to realizing their potential.

Sectors Benefiting from the Budget Which sectors are likely to benefit from this budget?
Aamar Deo Singh: Several sectors are set to gain:

FMCG & Consumption Goods – Stocks have been beaten down but could see recovery due to increased disposable income.
Pharma & Healthcare – Relaxations, particularly in cancer medicine pricing, are positive.
Textiles – With Bangladesh facing economic turmoil, India has an opportunity to capture a larger market share. The five-year cotton production mission also supports growth.
Auto (Two-Wheelers) – Many stocks have corrected significantly, and budgetary measures provide some support.
Fisheries & Shipping – Government focus in these areas will drive growth.
Hospitality: The sector may benefit due to increased discretionary spending.

Sectors Facing ChallengesWhich sectors might struggle post-budget?
Aamar Deo Singh: Aamar Deo Singh: The real estate sector had high hopes for an increase in the affordable housing limit from ₹45 lakh to ₹80 lakh and a hike in the ₹2 lakh interest deduction, but neither materialized. Similarly, no increase in tax deductions on housing loan interest. The upcoming RBI policy meeting will also impact housing. Heavy commercial vehicles could continue to face pressure. Lastly, Budget allocation for defence spending has been reduced, leading to some correction in stocks.Impact of Capex OutlayWith only a modest increase in capex from ₹11.11 lakh crore to ₹11.12 lakh crore, could sectors like railways, defence, and infrastructure be affected?
Aamar Deo Singh: While defence stocks have corrected slightly, I don’t see major negativity. Many stocks in these sectors have already turned multi-baggers, so this could be a consolidation phase. Investors should consider them for long-term opportunities, but adopt a SIP-based investment strategy to manage market volatility.Global Factors to Watch

U.S. Tariff Policies – Recent tariff hikes by Donald Trump could trigger a trade war.
Rupee Volatility – Despite depreciation, the government is maintaining fiscal discipline, but its future trajectory remains crucial.

Stocks to Watch Post-BudgetPost-Budget Strategy for Investors & TradersWhat should be the strategy post-budget for investors and traders?
Aamar Deo Singh:

For Investors: 2025 will be more challenging. Investors need to shift strategies—select quality stocks, temper return expectations, and adopt a 3- to 5-year investment horizon. Avoid penny and speculative stocks.
For Traders: Be prepared for volatility. Risk management is critical—define losses before entering trades. Follow the principle of “cutting losses early” while holding profitable positions for the long term.

Watch the full interview here.

Disclaimer: Recommendations, suggestions, views and opinions given by the experts/brokerages do not represent the views of Economic Times.

This article was originally published by a economictimes.indiatimes.com . Read the Original article here. .