Budget 2026 Stock Market Winners & Losers: Capex, PLI & Green Energy Steal the Show

Finance Minister Nirmala Sitharaman's Union Budget 2026 has charted a clear course for the Indian economy, prioritizing long-term structural growth driven by capital expenditure, domestic manufacturing, and green energy. Presented on February 1, 2026, the budget largely eschewed populist measures, focusing instead on fiscal consolidation and supply-side reforms. For Dalal Street, the message was clear: the government is doubling down on its investment-led growth strategy. While the market's initial reaction was predictably volatile, a closer look at the fine print reveals distinct sectoral winners and losers.

The Big Picture: Capex King Continues its Reign

The standout announcement of Budget 2026 is the substantial increase in the public capital expenditure outlay to ₹12.2 lakh crore for FY27. This sustained push reinforces the government's commitment to building world-class infrastructure, creating a powerful multiplier effect across the economy. The continued emphasis on roads, railways, and urban development provides strong revenue visibility for companies in the infrastructure and construction ecosystem.

Winners: This allocation is a direct tailwind for engineering and construction giants like Larsen & Toubro (L&T) and KEC International. The capital goods sector, with players like Siemens and ABB, stands to benefit from increased orders for machinery and electrical equipment. The announcement of seven new high-speed rail corridors further boosts prospects for railway infrastructure firms such as IRCON, RITES, and RVNL. Cement and steel companies are also clear beneficiaries due to higher demand from construction activities.

Manufacturing Takes Center Stage: 'Make in India' Gets a Booster Shot

The budget provides a significant thrust to domestic manufacturing through targeted schemes and policy support. The much-anticipated India Semiconductor Mission (ISM) 2.0 was announced to build a comprehensive ecosystem covering equipment, materials, and IP. Furthermore, the outlay for the electronics components manufacturing scheme was significantly increased to ₹40,000 crore, signaling strong intent to deepen the value chain.

Winners: Electronics Manufacturing Services (EMS) companies like Dixon Technologies and Kaynes Technology are poised to gain from the expanded component scheme. The defence sector also received a boost with an expected 10-15% increase in allocation, benefiting public sector undertakings like HAL, BEL, and Bharat Dynamics. A new ₹10,000 crore scheme for container manufacturing is set to bolster the logistics and industrial manufacturing space.

Green Shoots: A Budget for Sustainability

Aligning with India's 2070 net-zero target, the budget introduced several measures to promote green energy and sustainability. A notable proposal is the ₹20,000 crore outlay over five years to scale up Carbon Capture, Utilisation, and Storage (CCUS) technologies across power, steel, and cement industries. Customs duty exemptions on capital goods for lithium-ion cell manufacturing and inputs for solar glass were also extended, encouraging domestic production for the renewable energy sector.

Winners: Companies in the renewable energy space, including Tata Power and Adani Green, will benefit from the continued policy support. The CCUS initiative provides a long-term positive trigger for industrial majors like NTPC, Reliance Industries, and large steel and cement producers who are investing in decarbonisation technologies.

Healthcare Gets a Dose of 'Shakti'

The pharmaceutical and healthcare sector received a significant boost with the launch of the 'Biopharma Shakti' mission. With an outlay of ₹10,000 crore over five years, the initiative aims to drive R&D and innovation, particularly as India's disease burden shifts towards non-communicable diseases (NCDs). The budget also proposed establishing five regional medical value tourism hubs, positioning India as a global healthcare destination.

Winners: This is a major positive for pharmaceutical companies like Sun Pharma and Dr. Reddy's, biotechnology firms like Biocon, and Contract Research and Manufacturing Services (CRAMS) players such as Syngene and Divi's Labs. The medical tourism push is expected to benefit hospital chains like Apollo Hospitals, Fortis Healthcare, and Max Healthcare.

The Financial Sector: Stability Over Spectacle

For the banking and financial services sector, the budget focused on maintaining macro stability. The commitment to a fiscal deficit target of 4.3% for FY27 is a positive for the bond markets, which helps anchor interest rates and supports credit growth. Key reforms include the proposed restructuring of PFC and REC, and measures to deepen the corporate bond market. Additionally, making TReDS receivables eligible for securitisation will improve liquidity for MSMEs.

Winners: The banking sector is a key beneficiary of a stable macroeconomic environment and sustained credit demand from the capex push. NBFCs and fintech platforms focused on MSME financing will gain from the TReDS reforms.

The Mixed Bag: Traders, Textiles, and Tourism

While the budget was largely positive for investment-oriented sectors, it presented a mixed picture for others. The most significant negative surprise was the hike in the Securities Transaction Tax (STT) on futures and options contracts. This move is expected to increase the cost of trading and could impact volumes, affecting the profitability of brokerage firms and exchanges.

Losers: Capital market players, including stock exchanges like BSE and brokerage houses like Angel One, are clear losers from the STT hike.

Potential Winners: The budget announced an integrated program for the textile sector, including a National Fibre Scheme and support for mega textile parks, which is positive for companies like Arvind Ltd and KPR Mill. Similarly, the focus on developing 15 archaeological sites and eco-tourism trails will benefit hospitality and travel companies like Indian Hotels and IRCTC.

Sector	Key Announcement	Impact	Stocks to Watch
Infrastructure & Capital Goods	Capex outlay increased to ₹12.2 lakh crore; 7 new high-speed rail corridors.	Positive	L&T, Siemens, ABB, RVNL, KEC Intl.
Electronics & Defence	ISM 2.0 launched; Electronics components scheme outlay raised to ₹40,000 cr.	Positive	Dixon Tech, Kaynes Tech, HAL, BEL
Green Energy	₹20,000 cr for CCUS; Customs duty relief for Li-ion & solar components.	Positive	Tata Power, NTPC, Adani Green
Healthcare & Pharma	₹10,000 cr 'Biopharma Shakti' mission; 5 medical tourism hubs.	Positive	Sun Pharma, Biocon, Apollo Hospitals
Banking & Financials	Fiscal consolidation path maintained; TReDS reforms for MSMEs.	Positive	SBI, HDFC Bank, ICICI Bank
Capital Markets	Securities Transaction Tax (STT) hiked on F&O contracts.	Negative	BSE, Angel One, MCX
Textiles & Tourism	Integrated textile program; Development of 15 heritage sites.	Positive	Arvind Ltd, Indian Hotels, IRCTC

Investor Takeaway

Union Budget 2026 is a document of continuity and conviction. It doubles down on the government's strategy of fostering growth through public investment and creating a conducive environment for domestic manufacturing. Investors should look beyond the single-day market noise and focus on the long-term structural themes emerging from the budget. The clear winners are sectors tied to infrastructure, manufacturing, green energy, and healthcare innovation. The budget signals a preference for patient capital and sustainable growth over short-term consumption boosts, setting the stage for the next phase of India's economic expansion.