Capital goods stock plunged up to 8% on BSE in Tuesday's trade after the Union Finance Minister Nirmala Sitharaman proposed to maintain the capital expenditure target at Rs 11.11 lakh crore for this fiscal year as announced in the interim budget in February.
While announcing the interim Budget ahead of the Lok Sabha elections, India had proposed boosting the capital expenditure target by 11.1% to record Rs 11.11 lakh crore for fiscal year 2025, banking on its huge multiplier impact on economic growth and employment creation.
Shares of ABB India declined 8.3% to Rs 7,067 on BSE. Bharat Electronics, L&T, Fonlex Cables, Bharat Forge and Hindustan Aeronautics shares fell 3-6%. AIA Engineering, BHEL, Carborundum Universal, GMR Airports, Grindwell Automation, and Honeywell Automation also dropped up to 3%.
Meanwhile, Apurva Sheth, Head of Market Perspectives & Research Samco Securities, said, «The capex target of FY25 has been set at Rs 11.1 lakh crore, up by 11.1%. This is unchanged from that announced in the interim budget in February. No change in capex outlay is a major positive and shows the government's resolve to balance both the infrastructure development and populism of coalition politics.»
The FY25 capex measured at 3.4% of GDP,