Finance Minister Nirmala Sitharaman is set to present her record eighth consecutive Union Budget on February 1. The country looks forward to positive cues in the Budget amid global uncertainties over US President Donald Trump's tariff announcements.

The Nifty has lost 4% since the post-elections interim budget on July 23, while the mid-cap and small-cap indices have shed 4.6% and 8.1% due to a slowdown in the world's fifth-largest economy that has eaten into corporate earnings and driven away foreign investors. The Indian stock markets will remain open on February 1, despite it being a Saturday. Investors are actively waiting for market action by closely monitoring the Budget. The sectors that would remain in focus today are defence, agriculture, railways and infrastructure.

Railways

Railways always remain under focus during a Budget. Union Budget 2025 is expected to hike the gross budgetary support (GBS) to the Ministry of Railways (Indian Railways) by 15-18 per cent to around Rs 2.9 lakh crore-Rs 3 lakh crore, officials aware of the ongoing discussions told a source.

The expected hike in GBS comes after the increase in budgetary allocation in Union Budget 2024-25 by just five per cent to around Rs 2.52 lakh crore from 2.4 lakh crore a year back. The shares of railway companies had plunged after the lower-than-expected allocation in the interim Budget 2024. However, the stocks have been making strong gains in the past few days amid market buzz over increased allocation in the upcoming Budget.

The stocks that would remain in focus today are Indian Railway Finance Corporation (IRFC), Rail Vikas Nigam Ltd (RVNL), Indian Railway Catering and Tourism Corporation (IRCTC), Container Corporation of India (CONCOR), Ircon, Titagarh Rail Systems, RailTel Corporation of India, Texmaco Rail and Engineering, Jupiter Wagons among others.

Defence

The defence sector is one of the key areas that may see a strong increase in allocation in the upcoming Union Budget 2025. The Ministry of Defence has designated 2025 as the 'Year of Reforms,' with an emphasis on modernisation and indigenisation. The defence budget is expected to focus heavily on capital expenditure, especially for electronics, vehicles, and aircraft, which will benefit companies in the defence manufacturing sector.

According to a recent HDFC Securities report, the defence budget is expected to see a considerable increase in capital expenditures, allowing for the introduction of new defence projects. The key stocks that will be under active watch today are Hindustan Aeronautics Limited (HAL), Data Patterns (DPIL), Mazagaon Dock Shipbuilders Ltd (MDL), Bharat Dynamics and BEML.

Infrastructure

The Economic Survey 2024-2025, tabled before the Parliament on January 31, emphasised the need to come up with a new way to increase private sector financing in the infrastructure sector. The survey highlighted that India will need a continued step-up of infrastructure investment over the next two decades to sustain a high rate of growth.

The infrastructure stocks will remain in focus today, even before the Budget is presented, as an after-effect of the Economic Survey. These include Larsen & Toubro (L&T), Adani Ports, Ambuja Cements, Bharat Forge, DLF, GAIL, NTPC, Reliance Industries, UltraTech Cement and others.

Agriculture

The Indian government is set to increase its spending for the agriculture sector by about 15 per cent to nearly $20 billion, its biggest increase in six years, Reuters recently reported. Fertiliser stocks will be a major beneficiary of such change. Market experts, however, anticipate that the Finance Minister will allocate Rs 1.7 lakh crore towards fertiliser subsidies—marking a slight increase from the Rs 1.64 lakh crore set aside in FY25. Fishery stocks will also be under focus today.

Shares of RCF, Madras Fertiliser, Mangalore Chemicals and Fertilisers, National Fertilisers, Paradeep Phosphates, and Coromandel International will be under active watch by investors today.