The Union Budget announced on February 1 was largely in line with analysts’ expectations, with Finance Minister Nirmala Sitharaman maintaining fiscal discipline by lowering the fiscal deficit to 4.3 percent of GDP for FY27 (from 4.4 percent in FY26), based on nominal GDP growth of 10 percent and tax revenue growth of 8 percent. Further, as expected, the government increased capital expenditure by 9 percent to Rs 12.2 lakh crore, providing a boost to infrastructure and defence, while also focusing on employment generation and allocating funds to emerging segments such as data centres, artificial intelligence, tourism, and MSMEs.
The market did not anticipate any incremental growth stimulus, as the government had already announced several policy measures in the recent past, including GST rationalisation and relief in personal income tax. Additionally, the RBI had reduced the repo rate by 125 basis points in 2025, along with a 100 basis-point cut in the CRR, which had already supported growth.
However, the key disappointment that spooked markets was the increase in Securities Transaction Tax (STT) on futures and options. Experts believe this will not only impact domestic brokerages but also foreign institutional investors (FIIs), who use the F&O segment extensively as a hedging mechanism. Furthermore, the absence of any direct measures to address capital flows or currency stability also weighed on investor sentiment. The benchmark indices corrected 2 percent on Sunday.
"Overall, the budget is a mixed bag for capital markets, with a stable tax regime being maintained, although increases in certain STTs and the borrowing programme may cause some disappointment," Ashish Gupta, CIO at Axis Mutual Fund said.
In the backdrop of persistent global uncertainty, Harish Krishnan, CIO – Equity at Aditya Birla Sun Life AMC believes the budget reflects realism on policy and fiscal prudence. "The government remains steadfast on its commitment to consolidation; there is a notable shift from supply-side capex-led stimulus towards supporting domestic consumption. However, elevated borrowing levels may case market discomfort in the near term but expectations in the budget seem to be conservative and leave room for upside," he said, adding the outlook for equities over the medium term does not alter too much.
Experts have identified 9 stocks that could be considered for investment post the Union Budget:
Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services
Apollo Hospitals Enterprises | Target: Rs 9,015
Apollo Hospitals (APHS) stands to benefit from Budget 2026 initiatives, including regional medical tourism hubs, caregiver training, accredited clinics, and the Rs 10,000 crore Biopharma Shakti mission, which support international patient inflows, hospital expansion, and clinical research. APHS is gearing up for the next growth phase via a sustained shift toward higher-acuity cases and a disciplined expansion plan, with 3,660 beds to be added over five years.
HealthCo execution remains on track, with Apollo 24/7 nearing EBITDA breakeven by Q4FY26, while AHLL’s diagnostics-led strategy drives sustained growth. We remain positive, forecasting a 14%/17%/24% revenue/EBITDA/PAT CAGR over FY25–28.
Mahindra & Mahindra | Target: Rs 4,521
Mahindra & Mahindra (M&M) is well positioned to benefit from the Rs 1 lakh crore infrastructure capex, incentives for advanced construction equipment, and the revival of 200 industrial clusters, alongside continued emphasis on farm mechanisation and rural productivity. These initiatives support sustained demand across tractors, construction equipment, and mobility solutions.
M&M targets strong long-term growth, with an 8x expansion in SUVs and LCVs and 3x growth in the Farm segment over FY20–30 (~12% revenue CAGR), aided by new launches, platform rollouts, and volume gains. Growth businesses continue to scale rapidly, while disciplined capital allocation underpins returns.
Biocon | Target: Rs 460
Biocon is well positioned to capitalize on the Rs 10,000 crore Biopharma Shakti mission, which emphasizes biologics, biosimilars, and non-communicable diseases, aligning with its diabetes and oncology portfolio and boosting domestic biologics manufacturing. The acquisition of Viatris’ biosimilar business strengthens Biocon’s global integrated biologics leadership, complementing its product development and manufacturing capabilities.
With ongoing scale-up across biologics, generics, and CDMO, coupled with new product launches like insulin aspart and operating leverage in Syngene, Biocon is set for a strong earnings revival over FY26–28.
Larsen & Tubro | Target: Rs 4,500
Larsen & Toubro (L&T) stands to benefit from Budget support for advanced infrastructure equipment, development of three dedicated chemical parks, and revival of 200 industrial clusters, expanding EPC opportunities across infrastructure, hydrocarbons, and defence. Order inflows remain strong, particularly from the Middle East, where 10–15% annual growth is expected over five years.
Growth is underpinned by thermal BTG projects, select domestic private capex, and emerging opportunities in data centers, electrolysers, and semiconductor design. Disciplined capital allocation, non-core divestments, and international diversification enhance execution visibility. We expect core EPC revenue/EBITDA/PAT CAGR of 16%/19%/22% over FY25–28.
Shrikant Chouhan, Head Equity Research at Kotak Securities
Indian Hotels | Target: Rs 830
Indian Hotel company (IHCL) is the largest play on India’s hospitality sector, supported by its extensive presence across mid-to-premium segments and strong positioning in both business and leisure destinations. IHCL is well positioned to benefit from the favourable demand-supply dynamics driving India’s hotel sector.
Tata Consultancy Services | CMP: Rs 3,675
TCS is well-positioned to be a core partner to clients across cloud, data & AI journeys. TCS is taking measures to close the gap with peers, including better focus on mega deals, reduced sales slippage & a renewed AI and M&A strategy. Initial results are encouraging.
Devarsh Vakil, Head of Prime Research at HDFC Securities
Sai Life Sciences | Target: Rs 1,160
In the budget, the government has proposed the Biopharma SHAKTI. The strategy will include a Biopharma-focused network with 3 new National Institutes of Pharmaceutical Education and Research (NIPER) and upgrading 7 existing ones. It will also create a network of over 1000 accredited India Clinical Trials sites.
Indian Contract Research, Development, and Manufacturing Organizations (CRDMO) market is poised to grow rapidly at a CAGR of 13-15% over 2024-2029E.
Sai Life Sciences (SLS) is an integrated CRDMO, capitalizing on niche capabilities and capacity expansion.
We remain optimistic about key factors such as: integrated business model across discovery, development, and manufacturing helps it emerge as a one-stop solution. Tapping the obesity and metabolic API (GLP) market across peptides, and small molecules (lab and commercial scale). Third, a differentiated global integrated delivery, R&D, and discovery model in key innovation hubs (US: Boston and UK: Manchester), with large-scale, cost-efficient manufacturing supported by R&D infrastructure in India.
We estimate 20% CAGR in revenue, while EBITDA and PAT to grow at faster pace at 28%/39% CAGR over FY25-28E.
Syrma SGS Technology | Target: Rs 920
The Indian government proposed increasing the Electronics Components Manufacturing Scheme outlay to Rs 40,000 crore for FY26-27, a significant jump from FY25-26. Syrma SGS is set to benefit, reporting a Rs 6,400 crore order book as of December 2025. The company projects over 30% YoY growth in revenue and EBITDA for FY27. Investors can buy the stock with a target price of Rs 920.
Zensar Technologies | Target: Rs 830
The Union Budget 2026-27 marks a decisive shift from "digital-first" to "intelligence-first," with a heavy emphasis on AI, semiconductors, and simplifying the tax landscape for IT giants and Global Capability Centres (GCCs). This landscape favours Zensar, which is leveraging AI-driven solutions and cross-sector diversification. Its focus on operational efficiency and strategic growth aligns perfectly with the nation’s evolving digital and industrial goals. Investors can buy the stock with a target price of Rs 830.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
