Budget 2026 Predictions: Top Sectors & Stocks to Watch Before Feb 1
In India, the Union Budget is a big plan that helps everyone to understand how the government will be using the money to grow the country. The 2026 budget matters more because the nation is trying to build more products and form trade relations on a global level.
With India and Europe signing major trade deals, we can see stock prices going high, which will help ventures earn more money in the next couple of years. In numbers, this could grow trade from $136.5 billion to $250 billion by 2031.
Many business leaders are taking this as a positive and are confident about the future. As per a new survey, around 80% of companies feel that India is going to rise at the same pace, with the economy jumping by 7% to 8%.
Although the stock prices might change quickly on the budget day (February 1, 2026), it would be interesting to see which industries become the government’s favorite this year.
What Budget 2026 Is Likely to Focus On
Budget 2026 will prioritize the growth in infrastructure, manufacturing, and exports. With the new adoption of AI, the government will be careful in spending on roads and railways. The Indo-EU deal is going to be a strong pillar to help Indian businesses reach more global customers.
How Budget Announcements Affect Stocks
| Timeline | Market Behaviour |
| Pre-Budget | Prices move on expectations |
| Budget Day | Sharp & emotional reactions |
| Post-Budget | Repricing based on clarity |
Infrastructure and Construction Stocks (L&T, UltraTech, ABB)
Government spending on roads and metros will likely impact companies like L&T, UltraTech, and ABB. They will grow with many long-term projects to complete.
Banking and Finance Stocks (SBI, HDFC Bank, ICICI Bank)
Banks care most about continuous growth, and the government not offering budget benefits. Careful borrowing plans will help keep banks like SBI, HDFC, and ICICI strong in the market.
Manufacturing and Export Stocks (Tata Motors, Bharat Forge, Dixon Tech)
“Make in India” perks and export rules are going to push manufacturing stocks, especially those selling in Europe.
| Company | Export Exposure |
| Tata Motors | Vehicles, EVs |
| Bharat Forge | Auto & defence parts |
| Dixon Technologies | Electronics |
Indo-EU Trade Deal: Why It Matters for Investors
The India-EU trade deal is going to be a big and long-term change that will open the doors of Europe for Indian businesses. For a lot of exporters, it is going to benefit from lower taxes and deductions.
Investors are seeing this as consistent demand and more earning opportunities that sell in Europe. Although the 2026 budget won’t decide everything, it will give a signal of government push to some sectors.
| Sector | Expected Impact |
| Manufacturing | Better export competitiveness |
| IT & services | Easier cross-border delivery |
| Renewables | Equipment and tech exports |
Defence and Railway Stocks (BEL, HAL, Rail Companies)
With the government’s focus on “Make in India” military equipment, companies like Bharat Electronics Limited (BEL) and Hindustan Aeronautics Limited (HAL) will see growth. At the same time, the railway companies are also likely to thrive even with minor investment.
Power, Renewable Energy, and EV Stocks (Tata Power, NTPC, Power Grid)
The adoption of clean energy is a slow but consistent process in India. This 2026 Union Budget is likely to invest more in power grids, renewable energy, and charging stations. When combined with the new trade deal with Europe, this will have a significant impact on companies like Tata Power, NTPC, Power Grid, etc.
Oil and Gas Stocks (Reliance, ONGC, GAIL)
Clear government rules and new trade talks on how we use gas, keep energy safe, and set prices affect companies like Reliance, ONGC, and GAIL.
Technology and IT Stocks (TCS, Infosys, Tata Elxsi)
IT companies are more concerned about the digital rules and Artificial Intelligence rather than taxes. Training programs, AI adoption, and easy export rules will boost TCS, Infosys, and more. The Indo-EU deal is also going to open European doors for these companies.
Travel, Transport, and Logistics Stocks (IRCTC, IndiGo)
The pre-evaluation of the Union Budget 2026 signals improved infrastructure and rising travel demand that will ultimately support IRCTC and IndiGo.
What Investors Should Look for on Budget Day
It is recommended to avoid noise and keep full focus on capital expenditure, export rules, the Indo-EU trade deal, and more.
Risks Investors Should Keep in Mind
Avoid making high expectations with the budget, as there can be disappointments for a few sectors. The pre-emotions about the budget are usually mere guesswork.
Conclusion
Union Budget 2026 is going to provide you with a way to assess stocks and impacts. Investors need to understand sector preferences and the long-term impact of trade deals to get meaningful insights.
FAQ’s
Q1. Which sectors are likely to benefit from Budget 2026?
Infrastructure, banking, manufacturing, exports, defence, renewable energy, and IT are expected to benefit.
Q2. How does the Indo-EU trade deal impact Indian stocks?
It provides better export opportunities, tax benefits, and long-term growth for companies selling in Europe.
Q3. Should investors make big moves on Budget Day?
No. Pre-Budget predictions are often based on expectations. Investors should focus on long-term trends and sector performance.
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This analysis is for informational purposes only. Please consult a SEBI-registered financial advisor before investing.
– Chandan Pathak
Equity Research Analyst, StockYaari