BEL, Tata Power, HAL, BDL, Premier, Waaree Energies, L&T: Likely Budget 2026 beneficiaries

MOFSL in its Budget 2026 preview note said its bottom-up analysis of expectations pointed to selective Budget beneficiaries across four likely focus areas. It sees higher capital expenditure across sectors such as defence, infrastructure, affordable housing, power and capital goods. The brokerage expects a few capital market measures aimed at assuaging investor sentiment. Besides, it sees steps to improve credit flows into smaller lending segments such as MFIs and MSME loans; and several procedural reform measures to improve ease of living and ease of doing business.

The Budget 2026 will be presented on February 1, Sunday.

MOFSL said stocks and sectors that could benefit if these expectations played out included Larsen and Toubro Ltd, ABB India Ltd, Siemens Ltd, Hitachi Energy India Ltd, Siemens Energy and KEC International.

It prefers defence players such as Bharat Electronics Ltd (BEL), Bharat Dynamics Ltd (BDL) and Hindustan Aeronautics Ltd (HAL). 

Among cement and building material stocks, it likes UltraTech Cement and JK Cement.  In the electrical and consumer durables segment, it prefers names such as Polycab India, KEI Industries and Crompton Greaves.

Among jewellery and consumer discretionary players, it likes Titan Company and PN Gadgil. Besides, MOFSL likes health insurer Niva Bupa; and capital market intermediaries such as asset management companies and registrar and transfer agents. The brokerage said it likes most housing finance companies and microfinance institutions; and infrastructure developers. 

City gas distributors including IGL, Mahanagar Gas and Gujarat Gas; gas and energy companies such as Petronet LNG and GAIL; renewable and power names Waaree Energies Ltd, Premier Energies Ltd, NTPC Ltd, Tata Power Company Ltd, Acme Solar Ltd and NTPC Green are seen as beneficiaries of likely Budget announcements.

MOFSL also prefers real estate developers such as Brigade Enterprises, Prestige Group, Sobha, Lodha Group and Godrej Properties.

MOFSL said the forthcoming FY27 Union Budget is expected to balance growth support with fiscal consolidation amid heightened geopolitical uncertainty. 

Based on its interactions, the brokerage said investors do not expect large, substantive measures, as the finance minister is required to navigate multiple competing variables.

This sets the base lower for some positive surprise, MOFSL said, adding that the Budget’s influence on markets had narrowed over time due to several extra-budgetary initiatives.

As a result, MOFSL said equity markets are likely to assess the Budget primarily for targeted and selective measures that could drive growth in specific sectors and help support investor sentiment.

MOFSL said the government remained committed to fiscal consolidation, with the fiscal deficit having eased from a Covid-induced peak of 9.2 per cent to an estimated 4.4 per cent in FY26. It said it does not expect a material deviation from this path, even as FY27 marked a transition towards a debt-to-GDP framework as the fiscal anchor.

The brokerage added that with consumption yet to recover fully and sentiment improving unevenly, a limited and pragmatic fiscal stretch could not be ruled out. It said markets are likely to be supportive if any such deviation is well targeted towards productive capital expenditure or measures to support consumption, rather than towards low-multiplier transfers or higher administrative spending.

MOFSL said the FY27 Union Budget is likely to place greater emphasis on capital expenditure. It noted that the FY26 Budget had been more tilted towards supporting middle-class consumption through personal income tax relief of about Rs 1 lakh crore, the impact of which is still playing out.

Given this backdrop, MOFSL said any incremental consumption support in FY27 is likely to be selective, with a stronger focus on capital spending in strategically important sectors such as defence, critical minerals, power, electronics, infrastructure and affordable housing.