Top Post-Budget Stock Picks for 2026: VBL, PFC, and L&T Lead Momentum

Following the presentation of the Union Budget 2026, the Indian equity market has entered a critical phase of trend reversals and emerging momentum. Investors are closely monitoring stocks that demonstrate technical strength and robust support zones. Sachin Gupta, Vice President of Research at Choice Equity Broking, has identified a selection of high-potential stocks based on breakout patterns, momentum indicators, and key moving averages. These picks, including Varun Beverages (VBL), Power Finance Corporation (PFC), Data Patterns, and Larsen & Toubro (L&T), offer favorable risk-reward setups for short to medium-term traders.

Varun Beverages Shows Positive Turnaround Signs

Varun Beverages (VBL) is exhibiting signs of a significant positive turnaround after rebounding from its immediate support zone near 460. The stock has successfully sustained its position above the 100-day Daily Moving Average (DMA), which highlights improving price stability and growing buyer confidence. This ability to hold above a key moving average suggests that the recent corrective phase may be concluding.

Momentum indicators further reinforce this bullish outlook. The Daily Relative Strength Index (RSI) is pulling up from lower levels, signaling renewed buying interest. Additionally, the price has moved decisively above the Ichimoku Cloud, indicating a strengthening bullish bias. Traders are advised to look for entry points in the 475-478 range, with a disciplined stop loss at 455 and targets set between 500 and 515.

Power Finance Corporation Breaks Consolidation

Power Finance Corporation (PFC) has registered a consolidation breakout, sustaining its price above the 100-day Exponential Moving Average (EMA). This technical setup indicates improving price strength and a potential shift toward a sustained bullish phase. The stock's stability above this moving average is a key indicator of growing investor confidence.

Recent trading sessions have seen strong volume participation, confirming accumulation at higher price levels. A trendline breakout on the daily chart further strengthens the bullish case, suggesting the start of a fresh upward leg. The 370 zone is currently acting as an immediate support area. Analysts recommend initiating long positions around 378-380, targeting 400 to 408, while maintaining a stop loss below 367.

Data Patterns Signals Short-Term Momentum Shift

Data Patterns is currently trading near the 2520 zone, reflecting steady price behavior following a corrective period. On the daily chart, the stock has managed to close above its 21-day Exponential Moving Average (EMA). This specific breakout signals a shift in short-term momentum from neutral to bullish, strengthening the overall positive bias.

For traders looking to capitalize on this shift, buying on dips in the range of 2470-2500 is considered a viable strategy. A stop loss should be maintained at 2298. The stock has the potential to move toward 2700 and 2800 in the short to medium term, provided the broader market sentiment remains supportive of the defense and electronics sectors.

Larsen & Toubro Revives Broader Trend

Larsen & Toubro (L&T) has formed a solid base near the 3720 zone and is witnessing a steady recovery on the daily chart. The stock is now comfortably sustaining above its 200-day DMA, which indicates a revival in the broader long-term trend. This stability reflects strengthening buyer confidence in the infrastructure giant.

Momentum indicators are turning supportive as the RSI rebounds from oversold territory. The stock has also taken support near the lower Bollinger Band and is gradually moving toward the mid-band, suggesting a normalization of price action. Traders may consider long positions in the 3850-3870 range, with a strict stop loss below 3650 and upside targets of 4100 and 4250.

Summary of Technical Recommendations

Broader Market Context and 2026 Outlook

The Indian equity market is transitioning from a liquidity-fueled rally to an era driven by earnings growth. In 2025, the Nifty 50 reached a record high of 26,326, delivering an annual return of 10.2%. However, broader markets lagged, with the Nifty Smallcap 250 dropping by 6.4%. This divergence highlights the importance of stock-specific selection in the current environment.

Axis Securities remains bullish on the market for 2026, projecting a Nifty base-case target of 28,100 by December 2026. This valuation is based on 20x December 2027 earnings. The brokerage suggests a buy-on-dips strategy, focusing on stocks with strong structural tailwinds and clear earnings visibility over the next 12 months.

Sectoral Insights: FMCG and Infrastructure

In the FMCG sector, Varun Beverages and Britannia are emerging as preferred picks. Analysts expect sales growth for food and beverage players to surge in double digits year-on-year. While some segments like home and personal care may see slower growth, margin pressures are expected to ease due to softening input costs. VBL, in particular, is poised for growth through its BevCo acquisition and expansion into South Africa and the DRC.

Infrastructure and capital-intensive sectors are also expected to benefit from policy support and domestic macro drivers. L&T remains a primary beneficiary of this trend, with its steady recovery and long-term moving average support indicating a robust outlook for the construction and engineering space.

Market Impact

The post-budget market environment is characterized by a shift toward large-cap outperformance. While the Nifty 50 has surged nearly 11% recently, small-cap indices have struggled. This trend favors established players like L&T and VBL. The upcoming board meeting for Varun Beverages on February 3, 2026, to discuss audited results and a final dividend, is expected to be a significant near-term trigger for the stock. Additionally, the acquisition of South African firm Twizza for 1,119 crore is viewed as a long-term growth driver for VBL.

Analysis Section

The current technical setups for these stocks suggest that the market is rewarding companies with clear visibility of earnings and strong balance sheets. The breakout above key moving averages (100-day and 200-day DMA) for VBL and L&T indicates that institutional interest is returning to these counters. For PFC, the volume-backed consolidation breakout suggests that the stock is ready for its next leg of growth, supported by the power sector's ongoing expansion.

Conclusion

The technical and fundamental outlook for the selected stocks remains positive as the market navigates the post-budget landscape. With key support levels established and momentum indicators turning favorable, VBL, PFC, Data Patterns, and L&T offer strategic entry points for investors. As the market shifts toward an earnings-led growth model, staying focused on high-quality stocks with proven technical breakouts will be essential for navigating the volatility of 2026.