Top 10 Stocks to Watch for Potential Gains from Budget 2026 Announcements
The upcoming Union Budget 2026 is generating a lot of buzz, and Jefferies, a leading financial services firm, has identified several sectors and stocks that could benefit from the potential announcements. Despite low expectations, the brokerage sees opportunities in areas like real estate, renewables, and defense. Here’s a comprehensive breakdown of the sectors and companies that could see a positive impact.
Budget expectations from the upcoming FY27 Union Budget remain low, with Jefferies noting that Finance Minister Nirmala Sitharaman is likely to adhere to the fiscal consolidation roadmap while focusing on defense-led capital expenditure and selective measures to support consumption. The brokerage expects the Centre to set the FY27 fiscal deficit at around 4.2% of GDP, which would imply a slower pace of consolidation of roughly 15–20 basis points annually over FY27–FY31. Alternatively, Jefferies said the government could choose to keep the deficit closer to 4.4% of GDP, signaling a push to support near-term growth. Such a stance would be positive for growth and equities but could lead to firmer bond yields.
Renewables Spending under the PM-KUSUM scheme for solar-powered agricultural pumps could rise sharply from about Rs 2,600 crore in FY26 to nearly Rs 10,000 crore in FY27, which would be positive 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 on a year-on-year basis.
Real Estate 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 positive for office REITs such as Mindspace and Embassy, data centre developers like Lodha, and real estate developers with significant exposure to GCC office space, including WeWork India, DLF, and Prestige. Separately, 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.
Hospitality 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 expected to benefit hotel and travel stocks broadly. Recognition of hotels as infrastructure and an expansion of schemes such as UDAN for aviation could further support the sector. In addition, announcements related to new airport privatization are likely to benefit players such as GMR and Adani Enterprises.
Defense On expenditure, Jefferies expects overall government capital spending to grow about 12% in FY27 to ₹12.5 trillion, but stresses that “the requirement of a reset in defence capex will take priority which may grow at a much higher 25%.” With year-to-date FY26 defence capex already up 57%, the brokerage sees non-defence capex growth moderating to the 5–10% range, even as welfare spending edges higher. This will bode well for PSU Defence companies.
Investors should keep an eye on these sectors and companies as the Union Budget 2026 approaches, as the potential policy changes and financial allocations could significantly impact their performance. Whether you are a seasoned investor or just starting, understanding these trends can help in making informed decisions.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of the Economic Times)
