Union Budget 2026 Stock Picks: Axis Securities Highlights Key Beneficiaries
As the Union Budget for FY2026–27 approaches, market participants are preparing for a significant policy event that could shape sectoral leadership and influence medium-term market trends. According to Axis Securities, India enters the budget season with relatively strong domestic fundamentals, even as global growth remains uneven amid geopolitical risks, tighter financial conditions, and slowing external demand.
Market Focus on Growth and Fiscal Consolidation
The brokerage noted that investors are likely to focus on whether the government can sustain growth momentum without diluting its fiscal consolidation path. India’s real GDP growth is estimated at around 7.4% for FY26, supported by government-led capital expenditure, resilient services exports, and gradual improvement in private investment sentiment. However, uneven global growth, geopolitical risks, and moderation in consumption demand necessitate a carefully calibrated fiscal strategy.
Markets are likely to favour a Budget that sustains growth without compromising medium-term fiscal consolidation, Axis Securities said. The brokerage emphasized that capital expenditure remains the cornerstone of India’s growth strategy, with sectors linked to infrastructure, manufacturing, and energy transition expected to remain in focus.
Axis Securities’ Budget Stock Picks
In its pre-Budget note, Axis Securities identified a set of stocks it believes are well positioned to benefit from the government’s policy priorities. The brokerage’s positive budget picks include:
- UltraTech Cement
- Maruti Suzuki
- Bharti Airtel
- NALCO
- Prestige Estates
- Chalet Hotels
- Max Healthcare
- CreditAccess Grameen
These companies are aligned with themes such as infrastructure spending, housing, consumption recovery, healthcare expansion, and financial inclusion. Axis Securities also highlighted several thematic plays outside its core coverage universe, including:
- GMDC as a rare-earths opportunity
- BEL and MTAR in defence manufacturing
- Amara Raja Energy in the EV ecosystem
- CESE as a power reform play
- M&M Finance as a credit growth beneficiary
Sectoral Expectations and Macro Outlook
From a sectoral perspective, Axis Securities expects autos and ancillaries to benefit from higher disposable incomes and stable tax structures, while banks and NBFCs could see improved credit demand from capex-led growth and MSME support measures. Infrastructure-linked sectors such as cement, metals, power, and construction remain key beneficiaries, while healthcare, hospitality, and telecom could gain from targeted policy support and structural tailwinds.
On the macro front, Axis Securities expects the government to allocate around ₹12–13 trillion toward capital expenditure in the Union Budget 2026–27, implying a 10–15% year-on-year increase. Roads, railways, logistics infrastructure, defence indigenisation, urban infrastructure, housing, power transmission, and renewable energy are likely to be key beneficiaries. The brokerage noted that sustained public capex has been instrumental in crowding in private investment and supporting earnings visibility across core sectors.
Fiscal Consolidation and Taxation Focus
Fiscal consolidation is expected to remain a key anchor for markets. Axis Securities said the government is likely to target a fiscal deficit of around 4.2–4.4% of GDP for FY27, which would reinforce policy credibility and help contain bond yields and inflation expectations. Disinvestment and asset monetisation could play a larger role in non-tax revenue generation, with potential proceeds estimated at ₹50,000–70,000 crore, although execution remains a monitorable.
The brokerage also pointed to the RBI dividend as an important support to government finances. A higher-than-budgeted surplus transfer could improve fiscal optics without forcing cuts in growth-oriented expenditure. On taxation, Axis Securities expects the focus to remain on simplification rather than aggressive rate cuts, with possible incentives targeted at manufacturing, green energy, and innovation.
Overall, Axis Securities said the Union Budget 2026–27 is likely to strike a balance between growth support and macro stability, a combination that could keep India favourably positioned within global equity allocations despite persistent external uncertainties.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
