Market Reacts Mutedly to Union Budget

Feb 01, 2025

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Market Overview

Nifty opened slightly higher on budget expectations, touching 23,632.45 before the session began. However, sentiment shifted, pulling the index down to 23,318.39 before a partial recovery. It closed 0.11% lower at 23,482.15, ending the day nearly flat.

Market reaction remained muted despite no income tax on a ₹1 lakh monthly income and nil tax for salaried individuals earning up to ₹12.75 lakh per annum. With the budget behind, the focus shifts to global cues, RBI’s policy meeting, and corporate earnings to guide near-term sentiment.

Broader Market Performance:

The broader market had a mixed session today. A total of 2,846 stocks were traded, of which 1,419 advanced, 1,328 declined, and 99 remained unchanged.

Sectoral Performance:

Sectoral performance was mixed, with Nifty Realty leading the gains, up 3.38%, followed by Nifty FMCG and Nifty Consumer Durables at 3.01% and 2.96%, respectively. Nifty Energy saw the largest decline, down 2.13%, while Nifty PSU Bank and Nifty Metal dropped by 1.59% and 1.20%. Other indices showed slight losses.

Net Flow Breakdown for the day:

FII/FPI: Net outflow of -₹1,327.09 crore (Bought ₹987.59 crore, Sold ₹2,314.68 crore)
DII: Net inflow of ₹824.38 crore (Bought ₹13,364.01 crore, Sold ₹12,539.63 crore)

Change in OI for the day

The following is the change in OI for Nifty contracts expiring on 06th February:

The maximum Call Open Interest (OI) is observed at 24,000, followed by 23,500 and 23,800, indicating strong resistance around these levels.
The maximum Put Open Interest (OI) is at 23,000, followed by 23,500 and 23,200, suggesting key support levels at 23,000, and further support at 23,500 and 23,200.

Note: OI is subject to multiple interpretations, but generally, an increase in the call OI indicates resistance in a falling market, and an increase in the put OI indicates support in a rising market.

Source: Sensibull

Tijori is an investment research platform, and they have constructed niche indices for various themes and sub-sectors. They help you get a sense of the market performance of narrow slices of the market. You can also track the Promoter buying and other interesting stuff like Capex activity by the companies in the Tijori App’s idea dashboard.

Union Budget 2025-26: Key Highlights

Taxation & Income

No income tax on an average monthly income of up to ₹1 lakh.
Salaried individuals earning up to ₹12.75 lakh per annum to pay nil tax under the new tax regime.
Tax Deducted at Source (TDS) threshold on rent increased from ₹2.4 lakh to ₹6 lakh.
Updated Income Tax Return (ITR) filing time limit extended from two to four years.
Delay in Tax Collected at Source (TCS) payment decriminalized.
Revised personal tax slabs with a maximum rate of 30% for income above ₹24 lakh.

Economic & Fiscal Measures

Financial Year (FY) 2024-25 fiscal deficit is estimated at 4.8%, with a target of 4.4% in FY 2025-26.
Investment and turnover limits for Micro, Small & Medium Enterprises (MSMEs) enhanced by 2.5x and 2x, respectively.
₹1 lakh crore Urban Challenge Fund announced for city development.
₹1.5 lakh crore interest-free loans to states for capital expenditure.
Second Asset Monetization Plan (2025-30) to mobilize ₹10 lakh crore.

Agriculture & Rural Development

Prime Minister (PM) Dhan-Dhaanya Krishi Yojana to support 100 low-agricultural productivity districts.
Mission for Aatmanirbharta (Self-reliance) in Pulses launched with a focus on Tur (Pigeon Pea), Urad (Black Gram), and Masoor (Red Lentil).
Kisan Credit Card (KCC) loan limit increased to ₹5 lakh.
Comprehensive program for vegetable and fruit cultivation, high-yielding seeds, and cotton productivity.

Industry & Manufacturing

Credit guarantee cover for MSMEs raised from ₹5 crore to ₹10 crore.
National Manufacturing Mission to promote small, medium, and large-scale industries.
Basic Customs Duty (BCD) exemptions for capital goods in Electric Vehicle (EV) and mobile battery manufacturing.
10-year BCD exemption on shipbuilding raw materials.

Technology & Innovation

₹20,000 crore allocated for private-sector-led Research & Development (R&D) initiatives.
National Geospatial Mission for urban planning and infrastructure.
Centre of Excellence in Artificial Intelligence (AI) for Education with a ₹500 crore outlay.

Infrastructure & Connectivity

Modified UDAN (Ude Desh Ka Aam Nagrik) Scheme to improve regional connectivity to 120 new destinations.
₹15,000 crore Special Window for Affordable & Mid-Income Housing (SWAMIH) Fund for completing 1 lakh stressed housing units.

Social Welfare & Employment

Identity cards, e-Shram registration, and healthcare benefits for gig workers under Pradhan Mantri Jan Arogya Yojana (PMJAY).
₹30,000 Unified Payments Interface (UPI)-linked credit card limit for PM SVANidhi (Street Vendor’s AtmaNirbhar Nidhi) beneficiaries.
50,000 Atal Tinkering Labs (ATLs) to be set up in government schools over five years.

Trade & Exports

Export Promotion Mission to boost MSME exports.
BharatTradeNet (BTN) is proposed as a unified digital platform for trade documentation and financing.
Infrastructure and warehousing upgrades for air cargo and perishable goods.

Regulatory & Financial Sector Reforms

Foreign Direct Investment (FDI) limit in insurance increased from 74% to 100%.
Jan Vishwas Bill 2.0 to decriminalize over 100 legal provisions.
Investment Friendliness Index of States to promote competitive federalism.

Customs & Import Duties

Basic Customs Duty (BCD) exemptions on 36 lifesaving drugs for cancer, rare, and chronic diseases.
BCD on Interactive Flat Panel Display (IFPD) increased to 20%, while Open Cells reduced to 5%.
BCD on frozen fish paste reduced from 30% to 5%; BCD on fish hydrolysate reduced from 15% to 5%.

Source: Press Information Bureau (PIB), Government of India

What’s happening in India

SEBI proposes a unique UPI address to ensure payments go only to registered intermediaries and suggests raising the UPI limit for capital markets to ₹5 lakh per day. Public feedback is open until February 21, 2025. Dive deeper

TVS Holdings Limited acquired an 80.74% stake in Home Credit India Finance for ₹554.06 crore on January 31, 2025, from Home Credit India B.V. and Home Credit International A.S. The acquisition, disclosed under SEBI LODR Regulation 30(7), is subject to pending conditions. Dive deeper

SEBI is enhancing stock brokers' system audits with tech-based monitoring, auditor geolocation tracking, and standardized reports. Exchanges will enforce compliance, penalize lapses, and strengthen audit obligations. Dive deeper

The Nifty Consumer index gained after the Budget made no mention of a sin tax hike, easing concerns in the alcohol sector. Additionally, the increase in the income tax exemption limit to ₹12 lakh boosted overall consumption sentiment. Dive deeper

Max Healthcare has infused ₹50 crore into its wholly-owned subsidiary, Jaypee Healthcare Limited, through the allotment of 3,42,16,108 equity shares on a rights basis. This is part of the previously approved ₹125 crore infusion, as disclosed on January 30, 2025. Dive deeper

CESC Limited’s wholly-owned subsidiary, Eminent Electricity Distribution Limited (EEDL), is acquiring 100% of Chandigarh Power Distribution Limited for ₹871 crore, with assets and personnel transfer effective February 1, 2025. CPDL will become a wholly-owned subsidiary of EEDL and a step-down subsidiary of CESC. Dive deeper

Bharat Forge is investing ₹820 million in its wholly-owned EV subsidiary, Kalyani Powertrain Limited, via a rights issue for debt repayment and operations. The transaction is expected to be completed by February 10, 2025. Dive deeper

Hero MotoCorp CEO Niranjan Gupta will step down on April 30, with Vikram Kasbekar as acting CEO. The company also announced leadership changes and made its EV unit independent under Pawan Munjal’s mentorship. Dive deeper

National highway construction slowed to 5,853 km in April-December 2024, 5.83% lower than last year, due to election-related capital expenditure delays and monsoon disruptions. The government aims to implement barrier-free tolling on high-speed corridors by FY 2029. Dive deeper

Biocon plans to list its biosimilars business by March 2026 and launch five new biosimilars in the U.S. next fiscal year. The company aims for a double-digit market share, with the U.S. contributing 40% of its revenue. Dive deeper

Footwear stocks surged after the Budget announcement to promote high-quality long leather footwear. Dive deeper

WeWork India has filed its DRHP for an IPO, with WeWork Inc. and Embassy Buildcon set to divest around 25% stake. The firm operates 100,000 desks across eight cities with a 75% occupancy rate and reported 26% revenue growth in FY2024. Dive deeper

The Nifty Realty index surged after the Budget raised the TDS threshold on rent to ₹6 lakh annually, easing tax burdens and simplifying rental transactions. The policy also allows taxpayers to declare the annual value of two self-occupied properties as nil. Dive deeper

GMDC signed a 40-year agreement with JK Cement for supplying 250 million tonnes of limestone from its upcoming Lakhpat Punrajpur Mine in Gujarat. This deal supports JK Cement’s integrated plant project, boosting industrial growth and employment in the region. Dive deeper

SEBI banned two individuals for insider trading in Infosys stock, imposing a ₹30 lakh penalty each and ordering the disgorgement of ₹2.6 crore in illegal gains. The investigation found one had access to unpublished price-sensitive information, while the other executed trades based on it. Dive deeper

What’s happening globally

The U.S. personal consumption expenditures (PCE) price index rose 0.3% in December 2024, the highest in eight months, up from 0.1% in November. Annual PCE inflation increased to 2.6% from 2.4%, while core PCE remained steady at 2.8%, both meeting forecasts. Dive deeper

South Korea’s exports fell 10.3% YoY to a two-year low of $49.12 billion in January 2025, softer than the expected 13.5% drop. The decline, the first since September 2023, was driven by fewer working days and weaker auto (-19.6%) and petroleum (-29.8%) shipments, while semiconductor exports grew 8.1%. Dive deeper

The dollar index rose above 108.3 after the White House confirmed tariffs on Mexico, Canada, and China, reversing earlier pressure from delay rumours. A muted Core PCE increase and dovish stances from other central banks further supported the greenback. Dive deeper

The 10-year U.S. Treasury yield fell to 4.5%, a six-week low, as the Core Personal Consumption Expenditures (PCE) index met expectations, reinforcing Fed rate cut bets. Weaker Q4 GDP and tariff uncertainty also weighed on yields. Dive deeper

Unilever is considering a dual or triple listing for its €15bn ice cream division, including Ben & Jerry’s and Magnum, with Amsterdam likely alongside London or New York. A final decision is expected by March, with full separation planned by year-end. Dive deeper

Barclays faced a major outage on Friday, disrupting banking services like transfers and payments for its 20 million UK customers. The bank attributed the issue to technical difficulties, not a cyber attack, and assured customers they wouldn’t face penalties for delayed payments to His Majesty’s Revenue and Customs (HMRC). Dive deeper

Quarterly results

In this section, we'll dive into all the key highlights from today's intriguing results, covering the most impactful performances and standout moments. The numbers are comparable on a year-on-year (YoY) basis.

IndusInd Bank (+1.84%)

Financials:

Revenue: ₹12,801 crores, up by 11% YoY.
EBITDA: ₹7,078 crores, up by 2% YoY.
Net Profit: ₹1,401 crores, down by 39% YoY.
EPS: ₹17.99, down by 39% YoY.

Key Highlights:

IndusInd Bank's focus on digital banking and expansion in retail banking has resulted in increased revenue in these segments, contributing to the bank's stable performance.
The bank has effectively managed its operational costs, contributing to a robust operating profit before provisions and contingencies.

Outlook:

The bank aims to enhance its digital and retail banking segments further and anticipates continued growth in these areas. It is also focused on maintaining a strong asset quality and improving its risk management strategies.

Bandhan Bank (+0.01%)

Financials

Revenue: ₹5,479 crores, up by 17% YoY.
EBITDA: ₹2,198 crores, down by 14% YoY.
Net Profit: ₹426 crores, down by 42% YoY.
EPS: ₹2.65, down by 42% YoY.

Key Highlights:

Bandhan Bank experienced a notable improvement in retail banking revenue, driven by diversified financial products and strategic branch expansion.
The bank has implemented effective cost management strategies, leading to operational efficiencies despite a challenging market environment.

Outlook:

The bank is focusing on expanding its digital banking services and enhancing customer experience through technology upgrades to maintain competitive advantage and foster long-term growth.

Poonawalla Fincorp (-0.58%)

Financials

Revenue: ₹1,057 crores, up by 39% YoY.
EBITDA: ₹425 crores, down by 27% YoY.
Net Profit: ₹18.7 crores, down by 93% YoY.
EPS: ₹0.24, down by 93% YoY.

Key Highlights:

The company reported significant revenue growth this quarter driven by increased lending activities.
Despite the strong revenue performance, the dramatic decrease in net profit and EBITDA raises concerns about rising costs and possibly higher provisioning for bad loans.

Outlook:

The company is focusing on expanding its financial product offerings and improving operational efficiency to better manage costs and risk exposures. The company's strategic initiatives aim to enhance profitability in a challenging economic environment.

Karnataka Bank (-4.79%)

Financials

Revenue: ₹2,243 crores, up by 6% YoY.
EBIDT: ₹1,507 crores, up by 11% YoY.
Net Profit: ₹284 crores, down by 14% YoY.
EPS: ₹7.50, down by 21% YoY.

Key Highlights:

Karnataka Bank has achieved a Capital Adequacy Ratio of 17.64%, highlighting a robust capital structure and adherence to regulatory requirements.
The bank has maintained a Gross NPA ratio at 3.11% and a Net NPA ratio at 1.39%, indicating sustained asset quality amidst challenging market conditions.

Outlook:

The bank aims to continue its strategic focus on digital transformation and enhancing customer service to ensure sustained growth and profitability in the competitive banking sector.

Relaxo Footwear (+1.24%)

Financials

Revenue: ₹667 crores, down by 6% YoY.
EBITDA: ₹83.4 crores, down by 4% YoY.
Net Profit: ₹33.0 crores, down by 14% YoY.
EPS: ₹1.33, down by 14% YoY.

Key Highlights:

Relaxo Footwear has sustained moderate performance amid challenging market conditions.
The company continues to invest in marketing and product development to strengthen its market position.

Outlook:

The company is focused on expanding product lines and enhancing distribution channels to recover growth momentum.

Pfizer Limited (+0.54%)

Financials:

Revenue: ₹538 crores, down by 0% YoY.
EBITDA: ₹146 crores, down by 4% YoY.
Net Profit: ₹128 crores, up by 3% YoY.
EPS: ₹27.89, down by 2% YoY.

Key Highlights:

Pfizer Limited focused on strengthening its core pharmaceutical operations and advancing its research and development initiatives.
The company has successfully maintained a robust operational performance amidst a challenging regulatory environment.

Outlook:

The company is positioned to leverage its strong R&D capabilities to introduce new products, aiming to drive future growth and expand its market share in key therapeutic areas.

LIC Housing Finance Ltd (-2.24%)

Financials:

Revenue: ₹7,070 crores, up by 4% YoY.
EBITDA: ₹6,773 crores, up by 11% YoY.
Net Profit: ₹1,435 crores, up by 23% YoY.
EPS: ₹26.09, up by 23% YoY.

Key Highlights:

The company has seen a strong performance in its core operations of providing housing loans.
Loan transfers and asset management practices have been aligned with regulatory guidelines, ensuring robust compliance and financial stability.

Outlook:

The company continues to strengthen its market position with an emphasis on sustainable growth through diversified funding sources and technology-driven service offerings to enhance customer experience.

Aster DM Healthcare (-3.27%)

Financials:

Revenue: ₹1,050 crores, up by 10% YoY.
EBITDA: ₹186 crores, up by 24% YoY.
Net Profit: ₹64.4 crores, up by 25% YoY.
EPS: ₹1.14, down by 68% YoY.

Key Highlights:

Aster DM Healthcare has expanded its service offerings and improved operational efficiencies.
The company has seen significant growth in patient volume and successful integration of digital health services.

Outlook:

The company plans to continue its expansion in key markets with a focus on enhancing digital health platforms to drive future growth.

Oil and Natural Gas Corporation Ltd (-1.93%)

Financials

Revenue: ₹1,66,097 crores, down by 1% YoY.
EBITDA: ₹24,278 crores, up by 19% YoY.
Net Profit: ₹9,784 crores, down by 18% YoY.
EPS: ₹6.85, down by 20% YoY.

Key Highlights:

ONGC's performance this quarter shows a decrease in revenue and an increase in EBITDA margins, indicating a focus on operational efficiencies.
The company is actively managing its production and operational challenges, which is reflected in the financial outcomes.

Outlook:

The company is focusing on strategic investments and cost management to navigate the volatile market conditions and aims to enhance shareholder value through careful resource allocation and improving operational efficiencies.

Indian Renewable Energy Development Agency (-4.06%)

Financials

Revenue: ₹1,698 crores, up by 36% YoY.
EBITDA: ₹1,580 crores, up by 37% YoY.
Net Profit: ₹425 crores, up by 27% YoY.
EPS: ₹1.58, up by 26% YoY.

Key Highlights:

The expansion of financing operations in the renewable energy sector has resulted in significant revenue growth.
The establishment of IREDA Global Green Energy IFSC Ltd in GIFT City aims to facilitate debt financing for international renewable energy projects.

Outlook:

The company plans to continue its strategic expansion into international markets through its new subsidiary, focusing on securing sustainable energy projects and enhancing its portfolio of renewable investments.

Management chatter

In this section, we pick out interesting comments made by the management of major companies and policymakers of the Indian and Global Economy.

Ashok Chandra, Managing Director & CEO, Punjab National Bank on bad loan recovery and growth

"We aim to recover bad loans worth 170 billion rupees in FY25, with one-third expected during the January-to-March quarter, focusing on large corporate accounts."
"PNB has improved asset quality over the last two years, recovering 201.64 billion rupees in bad loans in FY24, and expects 50-60 billion rupees in recoveries in the current quarter."
"We’ve raised our loan growth target to 13%-14% and deposit growth target to 12%-13% this fiscal year, leveraging our vast network of over 10,000 branches." - Link

Challa Sreenivasulu Setty, Chairman, SBI on AI integration and consumer protection

"The growing interest in Artificial Intelligence, Gen AI and its integration into the financial sector has the potential to drive further advancements, fostering innovation, efficiency and resilience."
"With the advent of technology-based banking products, consumer education and protection are necessary, especially as these products are increasingly used by vulnerable sections of society."
"Cyber attacks and cyber crimes are the weakest link to the rapidly digitalising economy, with sectors like health, banking, and government being more susceptible." - Link

Mark Zuckerberg, CEO, Meta on company direction and challenges

"Meta has a chance to have a productive partnership with the United States government, and we intend to use it."
"I want the platform to facilitate discussions without necessarily agreeing with the content of those discussions, especially on topics like gender and immigration."
"I’m optimistic about Meta’s AI models, and I’m confident in the growth of Instagram Reels, especially with TikTok's future uncertain." - Link

Calendars

In the coming days, we have the following major events, corporate actions, and upcoming earnings releases:

That’s it from us. Do let us know your feedback in the comments and share it with your friends to spread the word.

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