Shares of capital goods companies were under pressure with the frontline companies from the sector tanked by up to 14 per cent from intraday highs post Finance Minister Nirmala Sithraman’s Budget speech.
Unlike previous Budgets that focused on increasing capital expenditure, this time the priority appears to be efficient deployment of allocated funds rather than just raising allocations, according to analysts. For FY2026, capex outlay was increased from Rs 11.11 trillion in the last fiscal to Rs 11.2 trillion crore, which is lower than industry expectations.
At 01:25 PM, BSE Capital Goods index, the top loser among sectoral indices was down 3.7 per cent at 62,269.50, as compared to 0.16 per cent decline in the BSE Sensex at 77,347.53. The index hit an intra-day low of 61,613.87, slipped 6 per cent from its intra-day high of 65,711.62.
Rail Vikas Nigam (RVNL), Bharat Dynamics (BDL), Hitachi Energy India, Siemens, ABB India, Titagarh Rail Systems, CG Power and Industrial Solutions, Bharat Electronics and Larsen & Toubro (L&T) were down in the range of 5 per cent to 10 per cent.
Among individual stocks, RVNL tanked 10 per cent to Rs 431.05 in intra-day trade, falling 14 per cent from its intra-day high amid heavy volumes. The average trading volumes on the counter jumped over five-fold with a combined 42.5 million equity shares changing hands on the NSE and BSE.
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Shares of BDL slipped 8 per cent to Rs 1,197.30, falling 11 per cent from its intra-day high of Rs 1,344.15 on the BSE. Siemens was down 7 per cent to Rs 5,651.85, declining 8 per cent from intraday high of Rs 6,174.80.
“Budget 2025 seems to have addressed the issue of consumption slowdown by providing a boost to the middle class in the form of lower tax. However, capex may not be as budgeted and could be a worry for growth. Further, New tax code needs to be seen for any changes in capital gain tax,” said Vikram Kasat, head of advisory at PL Capital.
“The focus on this budget is on consumption and capital expenditure. Tax relief to the middle class is expected to increase consumption and boost profitability of these companies. Capital Expenditure increase from Rs 11.11 trillion to Rs 11.2 trillion should boost growth prospects in the economy. The credit metrics of companies is expected to be stable in the coming months as domestic boost to the economy should largely mitigate adverse global developments”, said Murthy Nagarajan, head of fixed income, Tata Asset Management.
