Budget 2026 playbook: Brokerages identify 5 sectors that will benefit most

Union Finance Minister Nirmala Sitharaman presented her ninth consecutive Budget on Sunday, February 1, 2026, focusing on strengthening India’s manufacturing, infrastructure, and technology sectors. Budget 2026 proposed measures to boost capital expenditure, support key industries such as semiconductors, electronics, chemicals, and capital goods, and enhance demand visibility for sectors ranging from IT and data centres to aerospace, defence, and cement. 

 

With incentives for global cloud services, increased allocations for urban and rural infrastructure, and initiatives like ISM 2.0, the announcements are aimed at driving investment, creating jobs, and positioning India as a global hub across multiple high-growth sectors.

Here are the key sectors likely to benefit from the Budget 2026 measures:

Information Technology

FM Sitharaman announced a tax holiday until 2047 for foreign companies providing global cloud services from India, provided services to Indian customers are routed via an Indian reseller. She also proposes measures to fast-track the unilateral Advance Pricing Agreements for IT services companies, to conclude such agreements within two years, extendable by six months on request. Additionally, the budget proposed an automated safe harbour system with a uniform margin of 15.5 per cent, raising the revenue limit from ₹300 crore to ₹2,000 crore. 

 

 

According to Axis Securities, these measures are positive for the Indian IT sector as they reduce regulatory friction, enhance India’s position as a global IT and cloud hub, and support sustainable margin stability.

 

Analysts at JM Financial noted that the incentives are likely to attract global cloud workloads into India, boosting demand for data-centre capacity and benefiting IT services and colocation players. 

 

Stocks to benefit: IT services companies, Bharti Airtel (Nxtra), E2E Networks, Black Box, Coforge, Persistent, Zensar Technologies, Anant Raj, MTAR Technologies, and Netweb Technologies

Infrastructure

Budget 2026 proposed an enhanced capital outlay of ₹12.2 trillion for FY27, up 11 per cent Y-o-Y, with higher allocations for railways, roads, and urban infrastructure. It also focused on developing Tier II and III cities, seven high-speed rail corridors, sustainable cargo mobility through multimodal transport, and measures to de-risk infrastructure financing via an Infrastructure Risk Guarantee Fund. 

 

Analysts at Axis Securities believe that these steps are positive for infrastructure companies and are likely to support growth across highways, railways, metro, and urban projects. 

 

Higher allocations and targeted urban and transport projects are expected to improve project awarding and execution across EPC and diversified infra companies, JM Financial said in a note. 

 

Stocks to benefit: PNC Infratech, NCC, and Ahluwalia Contracts

Consumer Durables and EMS

FM Sitharaman announced India Semiconductor Mission (ISM) 2.0 to boost semiconductor manufacturing and raised the ECMS outlay to ₹40,000 crore, signalling continued support for electronics and EMS players. However, there was no clarity on mobile PLI, leaving some uncertainty around specific earnings triggers. 

 

Analysts at JM Financial said the focus on manufacturing is positive for EMS companies, while design-led initiatives may be neutral, and the higher ECMS outlay benefits companies like Dixon with pending approvals. Geojit Investments expects the ISM 2.0 to promote equipment, materials, and full-stack Indian IP. 

 

Stocks to benefit: Dixon Technologies, Syrma SGS, and Kaynes Technology

Aerospace and Defence

In another key announcement, Budget 2026 increased total defence capital expenditure by 17–18 per cent to around ₹2.2 trillion, with higher allocations for aerospace, engines, other equipment, and naval fleet expansion. Imports of raw materials for defence MRO parts have been exempted from basic customs duty, while R&D allocations were raised to ₹172.5 billion to support indigenisation. 

 

According to ICICI Securities, the sharper increase in capital outlay, particularly in the “Other Equipment” category, is positive for the domestic manufacturing ecosystem, covering upgrades, missile systems, radars, software, and electronic warfare. The incremental capital outlay aligns with the government’s target spend of ₹3 trillion by 2029 and is expected to support domestic defence manufacturing over the longer term. 

 

Stocks to benefit: Bharat Electronics, Data Patterns, HAL, and Solar Industries

Cement

FM Sitharaman announced increased allocations for Pradhan Mantri Awas Yojana (Urban and Urban 2.0) by 177 per cent and PMAY (Grameen) by 69 per cent, along with higher spending on PMGSY and other urban and rural infrastructure projects.

 

As per ICICI Securities, these measures provide strong demand visibility for cement, with consumption expected to grow 6–7 per cent in FY27, while supporting the broader construction ecosystem. Axis Securities also added that increased investment in roads and highways will directly drive cement demand, benefiting all major players.

 

Stocks to benefit: UltraTech Cement, JK Cement, Dalmia Bharat, and Ambuja Cement  Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.