New Delhi, Feb 2 || A likely boost to capex, services sector growth and AI in the Union Budget, along with slightly slower than expected fiscal consolidation, will likely support FY27 earnings, further helped by increased demand for equities through buybacks, Morgan Stanley has said.
The Budget balances debt-to-GDP reduction with slow fiscal consolidation and support for growth through both cyclical and structural measures.
“We remain constructive on Indian equities – Overweight Financials, Consumer Discretionary and Industrials,” the global brokerage said in its note.
The Budget balances debt to GDP reduction with slow paced fiscal consolidation and support for growth through cyclical and structural measures.
It targets a fiscal deficit of 4.3 per cent of GDP for F27, in line with a central government debt to GDP ratio of 55.6 per cent in F27.
The Budget supports growth through three main segments. First, a continued emphasis on manufacturing, with measures that build on past steps such as support for semiconductors (ISM 2.0), rare earth magnets and legacy industrial clusters.