The Union Budget 2026 is expected to bring targeted sectoral allocations, policy reforms, and capital expenditure boosts across defence, railways, NBFC-MFI, fertilisers, affordable housing, precious metals, and export-oriented sectors.

Based on JM Financial Services research, here’s a detailed breakdown of potential Budget 2026 stock opportunities.

1️) Defence Sector – Higher Capital Allocation in Focus

Budget 2026 may see increased capital expenditure, R&D allocation, and stronger focus on UAVs, drones, and anti-drone systems.

Defence Stocks in Focus:

• Hindustan Aeronautics Ltd (HAL)

• Bharat Electronics Ltd (BEL)
• Bharat Dynamics Ltd (BDL)

Why Defence Could Benefit:

• Higher defence budget allocation
• Make in India push
• Export opportunity for defence equipment
• Government focus on indigenous manufacturing

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2️) Railways – Capacity & Safety Push

After muted growth, Budget 2026 is expected to increase allocation toward railway infrastructure, capacity augmentation, and safety systems like Kavach.

Railway Stocks in Focus:

• Rail Vikas Nigam Ltd (RVNL)

• RITES Ltd
• Titagarh Rail Systems Ltd
• Kernex Microsystems (India) Ltd

Railway Investment Themes:

• Railway capex increase
• Railway electrification
• Safety modernization
• Rolling stock expansion

 

3️) NBFC – MFI (Microfinance) Sector

A potential credit guarantee scheme for NBFC-MFIs may help them raise funds and lend to low-income borrowers.

NBFC-MFI Stocks in Focus:

• CreditAccess Grameen Ltd

• Fusion Finance Ltd

Growth Drivers:

• Rural lending growth
• Financial inclusion push
• Government-backed credit guarantees

4️) Fertilisers – Subsidy Support

Budget 2026 may see higher fertiliser subsidy allocation (₹1.7–₹2.0 trillion) due to elevated raw material prices.

Fertiliser Stocks in Focus:

• Coromandel International Ltd

• Deepak Fertilisers & Petrochemicals Corporation Ltd

Tailwinds:

• Agriculture sector support
• Raw material cost compensation
• Strong rural demand

5️) Affordable Housing – GST Redefinition

Redefinition of affordable housing (price/size) may attract lower 1% GST rates and stimulate housing demand.

Housing Finance Stocks in Focus:

• Aptus Value Housing Finance India Ltd

• Home First Finance Company India Ltd

Potential Triggers:

• GST benefits
• PMAY scheme support
• Housing demand recovery

 

6️) Precious Metals – Import Duty Changes

Possible import duty revisions on precious metals may impact bullion and related companies.

Precious Metal Stocks in Focus:

• Hindustan Zinc Ltd

• Muthoot Finance Ltd

Impact Themes:

• Gold and silver import policy
• Bullion demand
• Precious metal financing

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7️) Other Export-Oriented Sectors

Potential incentives for exporters in textiles, engineering, auto ancillary, and chemicals.

Stocks in Focus:

• Welspun Living Ltd
• Bharat Forge Ltd

Themes:

• Tariff protection
• Export incentives
• Manufacturing growth

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FAQs –

1. Which sector may benefit most from Budget 2026?

Defence and railways could benefit significantly due to potential capex increases.

2. Are railway stocks good before Budget 2026?

Railway stocks often react positively to higher infrastructure allocations.

3. How will Budget 2026 impact NBFC stocks?

Credit guarantee schemes and financial inclusion measures may support microfinance NBFCs.

4. Which fertiliser stocks may benefit from higher subsidy?

Coromandel International and Deepak Fertilisers could gain from subsidy allocation.

5. How can investors prepare for Budget 2026?

Investors can analyse sectoral themes, diversify portfolios, and focus on fundamentally strong companies.

6. Should investors buy stocks before Budget?

Budget volatility can be high. Investment decisions should align with long-term strategy.