Nirmala Sitharaman, the Finance Minister, has spoken. The tablet is closed. Now, the charts will open. Union Budget 2026-27 is not a statement of accounts; it is a conclusive shift from recovery to Acceleration. The government is anchored in the vision of a Viksist Bharat (Developed India) and has presented a clear action plan rather than an ambivalent strategy.
The fiscal deficit is narrowed to 4.3%, and a Capital Expenditure (Capex) record of 12.2 lakh crore is being bet on three pillars: Manufacturing, Infrastructure, and Energy Security.
However, in the case of the stock market, the devil is in the details. Although the STT increase on F&O has stirred trader nano, structural announcements in other sectors, such as Semiconductors, MSMEs, and Aviation, have significant long-term value.
This is your sector-by-sector analysis of Budget 2026: What was predicted, what was proclaimed, and what stocks are on your watchlist.
1. Semiconductors & Chemicals
The Expectation:
The market was anticipating the second round of the India Semiconductor Mission (ISM). It was supposed to shift focus from Fabs to the broader chemical, gas, and supply chain component ecosystem, which is now extensively imported.
The Announcement:
The FM provided an organizational redesign of the high-tech sector:
- India Semiconductor Mission (ISM) 2.0: It has been officially introduced and may have expanded the net to include component makers.
- Critical Minerals: A novel scheme of Rare Earth Permanent Magnets, including research, mining, processing, and manufacturing.
- Chemical Ecosystem: Establishment of 3 Special Chemical Parks to promote the production of special industrial chemicals in the country.
- Bio-Manufacturing: Biopharma SHAKTI Launch of biopharma to enhance the biotechnology industry.
The Outcome
This is a massive positive. With the emphasis on Rare Earth Magnets and Chemicals, the government is sealing the serious gaps in the EV and Chip supply chain. Chemical Parks will reduce logistics costs for specialty chemical firms, increasing their ability to compete with China in exports.
Budget 2026 – Semiconductor Stocks in Focus
Semiconductor/Electronics:
| Sector | Company | Current Price (₹) | Market Cap (₹ Cr) |
|---|---|---|---|
| Semiconductor / Electronics | Tata Electronics | N/A (Unlisted) | N/A |
| CG Power | 595.35 | 93,761 | |
| Kaynes Technology | 3,435.00 | 22,010 | |
| Moschip Technologies | 197.70 | 3,810 | |
| Specialty Chemicals | Tatva Chintan | 1,121.20 | 2,630 |
| SRF | 2,757.70 | 81,750 | |
| Gujarat Fluorochemicals | 2,925.00 | 32,130 | |
| Navin Fluorine | 5,959.00 | 30,540 | |
| Biopharma | Syngene International | 456.95 | 18,360 |
| Biocon | 363.15 | 58,800 |
Note: Prices and market capitalisation are indicative and subject to market movements.
2. Infrastructure & Railways
The Expectation
As the railway rally waned at the end of 2025, investors were jittery. The expectation was a moderation in capex or a shift to “soft infra” (welfare).
The Announcement
Capex is not decelerating; it is turning into Smart Connectivity.
- Record Capex: Public capital spending increased to 12.2 Lakh Crore, and this does not mean that the infrastructure super-cycle has reached a halt.
- High-Speed Rail: 7 High-Speed Rail Corridors (Growth Connectors) Announced (Mumbai-Pune, Hyderabad-Bengaluru, Delhi-Varanasi).
- Freight Corridors: New Express Freight Corridors between Dankuni (East) and Surat (West).
- Urban Infra: Emphasis should be placed on developing infrastructure in Tier-2 and Tier-3 cities to make them new economic centers.
The Outcome
The announcement of 7 new high-speed corridors is a surprise “Alpha” trigger. This shifts the narrative from track renewal to bullet trains. This will require high-grade steel, sophisticated signalling, and specialized civil engineering. Tier-2 city push is also a new cycle in the real estate in non-metro markets.
Budget 2026 – Stocks in Focus
| Sector | Company | Current Price (₹) | Market Cap (₹ Cr) |
|---|---|---|---|
| Civil / Infrastructure | Larsen & Toubro (L&T) | 3,911.30 | 5.37 LCr |
| NCC | 144.50 | 9.08 KCr | |
| Rail Vikas Nigam (RVNL) | 312.90 | 65.21 KCr | |
| IRCON International | 149.05 | 14.02 KCr | |
| Rolling Stock & Rail Equipment | BEML | 1,687.40 | 7.04 KCr |
| Titagarh Rail Systems | 772.50 | 10.40 KCr | |
| Siemens India | 256.30 | 20.33 KCr | |
| ABB India | 5,385.00 | 1.14 LCr | |
| Urban Real Estate | Sobha Ltd | 1,390.20 | 13.90 KCr |
| Prestige Group | 1,457.00 | 62.67 KCr |
Note: Prices and market capitalisation are indicative and subject to market movements.
3. Energy & Power
The Expectation
The road anticipated further growth of solar subsidies. Nevertheless, it was the buzz about New Energy, such as Hydrogen and Carbon Capture.
The Announcement
The Budget favored a high-tech energy transition over plain-vanilla solar.
- CCUS: A special plan of Carbon Capture, Utilization, and Storage that has a huge investment of 20,000 Crore.
- Nuclear Power: The exemption on customs duty on goods to be used in the Nuclear Power Projects has been extended to the year 2035 and covers all the plant capacities.
- Batteries: Basic Customs Duty (BCD) exemption of capital goods in manufacturing Lithium-Ion Cells.
- Solar Glass: BCD exemption on Sodium Antimonate, which is a major raw material of the solar glass, enhancing local solar panel manufacturers.
The Outcome
A 2035 extension of Nuclear Power tax breaks is a game-changer for base-load power. In the meantime, the ₹20k Cr on Carbon Capture is a direct benefit to old-fashioned thermal power players, whose attempt at greening. It is a middle-ground solution in favor of future energy (Batteries) and cleaner traditional energy (CCUS).
Budget 2026 – Stocks in Focus
| Sector | Company | Current Price (₹) | Market Cap (₹ Cr) |
|---|---|---|---|
| Nuclear / Power | NTPC | 346.70 | 3.36 LCr |
| Bharat Heavy Electricals (BHEL) | 252.10 | 87.73 KCr | |
| Power Grid Corporation of India | 259.90 | 2.41 LCr | |
| Battery / New Energy | Amara Raja Energy & Mobility | 814.15 | 15.36 KCr |
| Solar Value Chain | Borosil Renewables | 471.45 | 6.61 KCr |
4. Aviation & Defence
The Expectation
Defence stocks have been hot. The expectation was for higher allocation to R&D. In the case of Aviation, the industry would have preferred tax relief to make India a repair center.
The Announcement
- Aviation MRO: Waiver of Basic Customs Duty on raw materials imported to manufacture aircraft parts that are used in Maintenance, Repair, and Overhaul (MRO) units.
- Manufacturing: Duty exemption of designated aircraft parts.
- Seaplanes: A new “Seaplane VGF Scheme” to localize manufacturing.
The Outcome
India is also competing to repair the world’s planes. The government is making it cheaper to service a Boeing/Airbus in India than in Dubai or Singapore by eliminating the duties on MRO raw materials. It is a positive structural advantage to airlines (reduced expenditure) and defence companies (civil MRO diversification).
Budget 2026 – Stocks in Focus
| Sector | Company | Current Price (₹) | Market Cap (₹ Cr) |
|---|---|---|---|
| Defence / Aviation | Hindustan Aeronautics (HAL) | 4,268.20 | 2.85 LCr |
| Bharat Electronics (BEL) | 430.95 | 3.15 LCr | |
| Azad Engineering | 1,437.50 | 9.29 KCr | |
| Airline / MRO Plays | InterGlobe Aviation (IndiGo) | 4,641.50 | 1.79 LCr |
| SpiceJet | 22.69 | 3.46 KCr |
5. Agriculture & Fisheries
The Expectation
One of the themes was rural distress. Markets anticipated either cash handouts (PM-KISAN increase) or loan waivers.
The Announcement
The government prioritized the High Value farming and the Blue Economy instead of cash alone.
- Horticulture: Concentrate on high-density planting of Walnuts, almonds, and Pine Nuts as a way of minimizing imports.
- Fisheries (Blue Economy): Indian vessels have now been allowed to fish in the Exclusive Economic Zone (EEZ) Duty-Free. Such fish landed at foreign ports will be treated as exports.
- Digital Agri: AgriStack portal integration with AI to deliver farmers actual-time information about the weather and crops.
- Co-operatives: Dividend income from national co-operative federations is tax-deductible.
The Outcome
Deep-sea fishing companies are receiving significant regulatory relief by treating foreign landings as exports. The emphasis on nuts (walnuts/almonds) creates a new agri-processing niche. Digital Agri push will be an advantage to agri-tech companies.
Budget 2026 – Stocks in Focus
| Sector | Company | Current Price (₹) | Market Cap (₹ Cr) |
|---|---|---|---|
| Agri-Processing / Fisheries | Avanti Feeds | 782.10 | 10.66 KCr |
| Apeejay Surrendra Park Hotels | 119.99 | 2.56 KCr |
6. MSME & Services
The Expectation
Access to credit was a challenge for MSMEs, which are the main providers of employment. The services business (IT) desired to understand transfer pricing.
The Announcement
- SME Growth Fund: A 10,000 Crore SME Growth Fund and a top-up of 2000 Crore to the Self-Reliant India Fund.
- TReDS Expansion: A requirement to have TReDS (Trade Receivables Discounting System) as the settlement mechanism of all purchases of MSMEs by CPSE.
- IT Services Relief: The threshold for tax relief on IT services has been increased to 2,000 crore.
- Tourism: Buddhist Circuit Development of North East and a World Big Cat Summit.
The Outcome
TReds’ requirement is a radical change in MSME liquidity to ensure they receive payments on time. For IT companies, safe harbour reduces litigation risk with tax authorities, which is highly valued by them as Tax Certainty.
Stocks in Focus
| Sector | Company | Current Price (₹) | Market Cap (₹ Cr) |
|---|---|---|---|
| MSME Finance | Shriram Finance | 947.60 | 1.78 LCr |
| Bajaj Finance | 895.65 | 5.57 LCr | |
| MAS Financial Services | 305.10 | 5.54 KCr | |
| Tourism / Hotels | Indian Hotels Company (Taj) | 655.35 | 93.37 KCr |
| EIH Ltd | 320.20 | 20.06 KCr | |
| IRCTC (Buddhist Circuit Trains) | 602.30 | 48.18 KCr | |
| Mid-cap IT | Persistent Systems | 6,048.50 | 94.58 KCr |
| L&T Technology Services | 3,657.50 | 38.77 KCr |
7. Taxation & Finance
The Expectation
Investors were wishing to have LTCG relief or at least the status quo on the transaction taxes.
The Announcement
The Budget provided both relief and limitation.
- F&O Tax Hike (The Bitter Pill): STT on Futures increased by 0.02 to 0.05. STT on Options premium increased to 0.15%. This is intended to prevent excessive speculation.
- Buyback Tax: Buybacks are now subject to taxation as Dividends to shareholders, eliminating an important tax-arbitrage mechanism.
- TCS Relief (The Sweetener): TCS on foreign tour packages and education remittances was reduced to 2%, providing relief to the middle class.
- Financial Reforms: Reform in Power Finance Corporation (PFC) and Rural Electrification Corporation (REC).
The Outcome
An increase in STT is a mood-killer for brokers and high-frequency traders. Nevertheless, the TCS cut is the best for travel companies. The reorganization of PFC/REC may unlock value or simplify lending to the power sector.
Stocks in Focus
Negative Watch: BSE Ltd, CDSL, Angel One, MCX (Volume impact risk due to STT).
Bright Side: EaseMyTrip, Thomas Cook (TCS cut boosts outbound travel).
Neutral: IT Giants (TCS, Infosys) – Buybacks lose their appeal, probably to favour increased dividends.
Conclusion
Budget 2026 is a budget made by builders, not a trader’s budget.
It is simple and straightforward, cease speculating (F&O) and begin investing (Capex).
The government is investing in assets- Railways, Chemical Parks, Nuclear Plants, and MSMEs. Viksit Bharat is a theme of the physical generation of wealth. Your investment portfolio must align with this.
- Avoid: Falling into the knee-jerk volatility of the STT hike.
- Accumulate: Dips in high-quality Infrastructure, Manufacturing, and Tourism names which directly order book through the 12.2 Lakh Crore capex.
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