Budget 2025: Can fiscal moves spark stock market optimism? Hemant Majethia of Ventura Securities weighs in

PSU banks, oil refining, Infrastructure EPC and power are among the key sectors to watch out for amid the current geopolitical and macroeconomic environment, according to Hemant Majethia, CEO & Co-Founder of Ventura Securities. In an interview with Livemint, Majethia shares his insights on Budget 2025 expectations, market valuations, and investment opportunities amid recent corrections.

Addressing concerns over market sell-offs and FII outflows, Majethia remains optimistic about India’s macroeconomic outlook and advises investors on navigating mid and small-cap stocks in the current scenario. Here are edited excerpts:

Q. What are your expectations from Budget 2025 from the market’s perspective?

A. Recent numbers point to strong tax buoyancy. Direct tax collections are expected to exceed estimates by ₹73,000 - 83,000 crore, GST revenues remain solid, and corporate advance tax payments are up 16%. This could result in a lower fiscal deficit than targeted — a significant achievement.

If that happens in Budget 2025, it creates scope for higher investments in infrastructure, defence, railways, and other nation-building activities. It could even give the government room to reduce personal taxes to boost consumption. Proposals like these could spark optimism in the market.

Q. Could a populist Budget exacerbate the on-going sell-off in the markets?

A. With elections just behind us, there is no motivation for ‘populist’ measures in the Union Budget 2025-2026. In fact, the government could undertake proposals that boost consumption and investment and that will actually curb sell-offs and bring stability to the market.

Q. Which sectors should investors watch out for ahead of the Budget? Which sectors are you positive on?

A. PSU Banks declared strong results, and with a price-to-book value (PBV) of around 1, a re-rating seems imminent. Oil refining companies might also gain ground, with the US intent on lowering oil prices, as evidenced by Trump’s comments. Infrastructure EPCs, particularly in road construction, are looking promising. The power sector, with significant investments lined up, is another space to watch.

Q. What are the key concerns currently driving the market sell-off? When do you expect the market to stabilise?

A. Markets were overheated and a valid correction was overdue. Mid and small caps, for example, were trading at higher P/Es (Price-to-Earnings ratios) than frontline Nifty 50 stocks. The correction seems dramatic because it is so sharp. Now that it has happened, hopefully the market will stabilize when it finds its footing.

Q. When do you think the FII may return to the Indian markets and the outflows will stop?

A. That’s anyone’s guess but if the government takes positive steps to raise consumption and investment, it could happen sooner rather than later.

Q. How do you see market valuations after the recent correction? What strategy would you recommend for investing in mid and small-cap stocks?

A. Valuation is always a stock-specific metric. There is no blanket strategy for the overall market or even for sectors and there is no substitute for rigorous research before investing or disinvesting.

With the correction, many mid and small-cap stocks have dropped 25-40%, presenting attractive opportunities when their valuations are viewed in light of the Q3 results; there’s scope for good pickings.

Q. How do you perceive India’s macroeconomic outlook? Should investors adopt a cautious stance?

A. The first advanced estimates of GDP growth for FY2024-25 at 6.4% are lower than the spectacular 8% for FY2023-24 but it’s still a good number. India is one of the fastest-growing major economies, and continues to show resilience amidst global political turmoil and strategic tensions. So, well-informed equity investors can find stocks with good potential in the Indian markets.

Q. What new initiatives is Ventura Securities undertaking to drive growth and innovation?

A. We’re always looking for ways to make our customer experience better. In FY2023-24, we moved to scalable cloud infrastructure powered by AWS. This means faster trades, lower latency, and round-the-clock disaster recovery.

Plying our customers with reliable research and insights has also been at the core of our offerings. So, we’ve doubled down on delivering quality research, and SPOTLIGHT—our all-in-one investor assistant— helps our customers to track stocks, stay on top of market news, crunch numbers, and get financial insights—all in one place. 

To drive these initiatives and take them forward to the next level, we’ve strengthened our tech team over the past two years, on-boarding ~50+ domain experts; they’re focused on improving agility and quality across our products.

Read Budget 2025 Expectations Live Updates here

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.