Rural demand is showing a sustained recovery. The festival and wedding season has provided boost to demand for travel, jewellery, watches, quick service restaurant (QSR), footwear, apparel and durables, according to the report by PL Capital Group - Prabhudas Lilladher.

“We are already witnessing uptick in ordering momentum in Railways, Defense, Power, Data centres etc. the execution of which will accelerate growth in FY26 and beyond,” said Amnish Aggarwal, Director, Institutional Research.

“We expect a growth-oriented budget with an attempt to pump prime the economy and incentivise the middle class to increase spending,” he added.

India capex story, discretionary consumption and financialisation are some of the key themes to play for long-term gains.

Retail is on the verge of big transformation as quick commerce is changing the dynamics of not only grocery but also other discretionary segments.

“We believe extension of quick commerce in discretionary segment and food services can create near term disruptions in respective segments and impact profitability,” the report mentioned.

Cement should show better growth and profitability led by revival of construction activity and expected price hikes. Steel industry fortunes depend upon import duty and trend in global prices, according to the report.

Capital goods and defense should see improved ordering momentum and execution in coming quarters.

“Budget will hold key to sustainability of capex given likely miss in target spending in FY25. However, Defense, Power, Data Centers, railways and energy transition remain a potent theme,” the report noted.

As we enter and navigate through 2025, agriculture seems to be heading for a good Rabi crop and normal weather patterns should help cool down inflation to 4.3-4.7 per cent in FY26.

Higher crop output and increase in construction/factory activity and moderating inflation should bolster demand from fag end of Q4 FY25, said the report.