Jefferies Identifies 10 Stocks Poised to Gain from Budget 2026 Announcements
Budget expectations for the upcoming FY27 Union Budget remain relatively low, according to Jefferies. The brokerage anticipates that Finance Minister Nirmala Sitharaman will adhere to the fiscal consolidation roadmap while emphasizing defense-led capital expenditure and selective measures to support consumption. Jefferies expects the Centre to set the FY27 fiscal deficit at around 4.2% of GDP, implying a slower pace of consolidation of roughly 15–20 basis points annually over FY27–FY31. Alternatively, the government could opt to keep the deficit closer to 4.4% of GDP, which would signal a push to support near-term growth. Such a stance would be positive for growth and equities but could lead to firmer bond yields.
Jefferies has identified several sectors and stocks that could benefit from the upcoming Budget. In the renewables sector, spending under the PM-KUSUM scheme for solar-powered agricultural pumps is projected to rise sharply from about Rs 2,600 crore in FY26 to nearly Rs 10,000 crore in FY27. This would be highly beneficial for cell-backed solar players such as Emmvee Photovoltaic, Premier Energies, and Waaree Renewables. Meanwhile, allocations for the PM Suryaghar rooftop solar programme are expected to remain steady at around Rs 20,000 crore in FY27, broadly flat year-on-year.
In the real estate sector, potential policy support in the form of lower taxes for Global Capability Centres (GCCs) and data centres being set up in India could be a significant positive for office REITs such as Mindspace and Embassy, as well as data centre developers like Lodha. Additionally, a possible relaxation in the definition of “affordable housing” to include higher-ticket homes in Tier-I cities under the interest subsidy (CLSS) scheme could benefit affordable housing lenders such as Home First, as well as select developers including Lodha and Sunteck.
The hospitality sector is also expected to see beneficial announcements. An increase in budgetary allocation to support medical tourism and promote lesser-known destinations, along with higher investment in tourism infrastructure to cater to mega hospitality events, is anticipated to boost hotel and travel stocks. Recognition of hotels as infrastructure and an expansion of schemes such as UDAN for aviation could further support the sector. Announcements related to new airport privatisation are likely to benefit players such as GMR and Adani Enterprises.
In the defense sector, Jefferies expects overall government capital spending to grow by about 12% in FY27 to ₹12.5 trillion. However, the requirement of a reset in defense capital expenditure (capex) will take priority, with defense capex potentially growing at a much higher rate of 25%. With year-to-date FY26 defense capex already up 57%, the brokerage sees non-defense capex growth moderating to the 5–10% range, even as welfare spending edges higher. This will bode well for PSU defense companies.
These budgetary measures and sector-specific initiatives are expected to create favorable conditions for the identified stocks, potentially leading to positive market performance and investor interest.
