Pharma, textile and EMS stocks lead gains after Budget announcements

markets

• Pharma, textile, EMS stocks surged post Budget 2026 sector-focused measures.
• BioPharma Shakti initiative announced with Rs 10,000 crore outlay for biopharma
• Semiconductor Mission 2.0 and higher electronics spending boosted EMS stocks

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Shares of pharmaceutical, textile and electronic manufacturing services (EMS) companies emerged as top gainers after Finance Minister Nirmala Sitharaman announced a series of sector-focused measures in the Union Budget 2026.

The Budget was largely in line with market expectations, barring the hike in securities transaction tax on futures and options, which triggered a broader market sell-off. Outside the derivatives-related surprise, the government maintained its fiscal consolidation roadmap while continuing to support economic growth through higher capital expenditure and targeted policy support for emerging industries.

The government announced an 8 percent increase in capital expenditure to Rs 12.2 lakh crore for FY27, reinforcing visibility for infrastructure, capital goods and industrial companies. While the pace of spending growth moderated from earlier highs, the allocation is expected to sustain the investment cycle and provide continuity to order flows.

The Budget also marked a clear pivot toward new-age manufacturing and technology-driven sectors, with policy support announced for semiconductors, rare earth processing, biosimilars manufacturing, carbon capture technologies and electronics manufacturing. Several stocks linked to these segments witnessed strong gains following the announcements.

Pharma stocks rally

Pharmaceutical stocks rose sharply after the government announced a major push to position India as a global biopharma manufacturing hub.

The finance minister unveiled the BioPharma Shakti initiative, with an outlay of Rs 10,000 crore over the next five years, aimed at strengthening domestic manufacturing of biologics and biosimilars. The programme is intended to support capacity creation, reduce import dependence and enhance India’s competitiveness in high-value biopharmaceutical segments.

Following the announcement, the Nifty Pharma Index advanced, with shares of Sun Pharmaceutical Industries and Biocon gaining up to 3.8 percent and 2.9 percent, respectively.

Textile stocks gain on sector push

Textile stocks also witnessed strong buying interest after the government announced a multi-pronged strategy to expand and modernise the sector.

The Budget proposed the establishment of mega textile parks through a challenge-mode framework, with a special focus on technical textiles. The initiative aims to create large integrated manufacturing ecosystems and enhance competitiveness across the textile value chain.

Additional measures included a textile labour incentive scheme, a national handloom and handicrafts programme, a plan to strengthen textile skilling infrastructure, capital support for modern machinery, and the introduction of a proposed National Fibre Scheme.

Shares of Raymond and Trident surged more than 8 percent during intraday trade before paring some gains.

EMS stocks advance on electronics push

Electronic manufacturing services stocks also moved higher as the Budget strengthened India’s electronics and semiconductor ecosystem.

The government announced Semiconductor Mission 2.0, along with a near-doubling of the Electronics Components Manufacturing Scheme outlay to Rs 40,000 crore. Semiconductor spending was raised to Rs 8,000 crore for FY27 from Rs 4,300 crore, while the allocation for the Ministry of Electronics and Information Technology increased to Rs 21,633 crore.

Basic customs duty on mobile phones, printed circuit board assemblies and chargers was reduced from 20 percent to 15 percent, improving cost competitiveness and supporting domestic value addition. BCD exemptions for semiconductor and display manufacturing, solar equipment and consumer electronics have also been extended until FY28, providing longer-term capital expenditure visibility.

Shares of electronics manufacturers including Amber Enterprises India, Dixon Technologies India and Kaynes Technology gained following the announcements.