Budget 2025 stocks: L&T, KEC International, others fall up to 5% on modest capex tweak

A minor increase in the FY26 capital expenditure allocation by the government in Budget 2025 did not go down well with the capex stocks as they fell up to 5% in the day's trade on Saturday. The government announced a capex budget of Rs 11.2 lakh crore for the next financial year versus Rs 11.1 lakh crore in FY25.

Shares of Larsen & Toubro (L&T), J Kumar Infraprojects, Ahluwalia Contracts and power transmission & distribution company KEC International fell up to 5%. Meanwhile, certain stocks like KNR Construction and H.G. Infra Engineering conceded their day's gains and were trading flat around 2:15 pm. They had corrected by up to 6.4%.

The Street's expectation was an uptick of 10-15% this time around.



On the expectations, Mehta Equities had pegged an increase in defence Budget from Rs 6.22 lakh crore last year.

"The modest increase in Capex outlay from Rs 11.11 Lakh crore in last fiscal to Rs 11.2 Lakh crore is much lower than expectation. The government's focus until now was on Infrastructure and capex seems to be taking a hit due to political compulsions and freebie politics. With this modest increase the railways, defense, infrastructure and engineering is likely to take a hit. On the other hand, FMCG, Auto, and Consumer Durables are likely to be in the limelight going forward," Apurva Sheth Head of Market Perspective & Research said.

Stocks in capex intensive sectors like defense and railway sector were also punished because of the lack of any big bang announcements. Both defense and railway stocks were trading with sharp cuts up to 9%.

The government allocated Rs 4.92 lakh crore for defense while announcing a budget of Rs 2.67 lakh crore fro rural development. For urban development, Rs 96,777 crore was allocated. The government also announced a budget of Rs 1.71 lakh crore for agriculture and allied activities.

The market mood faded post the budget speech as the headline index gave up their morning gains.

The BSE Sensex was down by 199.71 points or 0.26% and trading at 77,300.86 around this time. The broader Nifty index was trading at 23,425, falling by -83.40 points or 0.35%.

This was Finance Minister Nirmala Sitharaman's 8th budget speech and her second in the Modi 3.0 government.

Also Read: Budget 2025 stocks: Shipping Corporation, Mazagon Dock jump up to 6% after FM announces sector revamp

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