February 1 Watchlist: Axis Securities’ 26 Stock Picks Ahead of Union Budget 2026
As the Union Budget 2026 approaches, market participants are once again bracing for a day that often sets the tone for Dalal Street in the months ahead. February 1 has traditionally been a high-volatility session, driven by expectations around fiscal discipline, growth-oriented spending, tax reforms, and sector-specific incentives. Against this backdrop, Axis Securities has released a focused list of 26 stocks it believes are well-positioned to benefit from the policy direction and economic priorities likely to emerge from Budget 2026.
Budget 2026: Key Themes Markets Are Tracking
Budget 2026 comes at a time when India’s macroeconomic fundamentals remain relatively strong compared to global peers, but challenges persist in the form of inflation management, global slowdown risks, and the need for sustained job creation. According to Axis Securities, the government is expected to continue its emphasis on capital expenditure (capex)-led growth, fiscal prudence, and targeted welfare spending.
The brokerage highlights four broad themes that could dominate the budget narrative:
- Infrastructure and Capex Push: Continued focus on roads, railways, defence manufacturing, and urban infrastructure is likely, as capex has proven to be a reliable growth multiplier.
- Manufacturing and “Make in India”: Policy support for domestic manufacturing, including PLI-linked sectors, could remain a priority to strengthen supply chains and boost exports.
- Consumption Revival: Measures aimed at rural demand, MSMEs, and middle-class disposable income could provide a boost to consumption-oriented sectors.
- Energy Transition and Sustainability: Clean energy, power transmission, and green infrastructure are expected to receive sustained attention.
Axis Securities’ 26-stock watchlist is built around these structural themes, rather than short-term budget-day reactions alone.
Infrastructure and Capital Goods in the Spotlight
A significant portion of Axis’ picks comes from infrastructure, construction, and capital goods. With the government likely to maintain or even increase its allocation towards roads, railways, metros, and defence, companies involved in EPC (engineering, procurement, and construction), heavy electricals, and project execution could see strong order inflows.
Axis believes that well-established players with robust order books, execution capabilities, and healthy balance sheets are best placed to benefit. These stocks are expected not only to react positively on budget day but also to deliver sustainable earnings growth over the medium term as projects move from announcement to execution.
Banking and Financials: Selective Opportunities
Financials remain a core pillar of the Indian equity market, and Axis Securities’ list includes select banks and non-banking financial companies (NBFCs). The rationale is rooted in improving asset quality, stable credit growth, and the possibility of policy measures that support liquidity and credit flow to productive sectors.
Public sector banks may benefit from continued recapitalisation support and governance reforms, while private banks and NBFCs with strong retail and MSME exposure could gain from any measures aimed at boosting consumption or small business growth. Axis emphasises selectivity, favouring institutions with proven risk management frameworks rather than broad-based exposure to the sector.
Manufacturing, Industrials, and Defence Plays
In line with the government’s push for self-reliance, Axis has identified several manufacturing and industrial names as budget beneficiaries. Defence production, in particular, remains a long-term structural theme, with expectations of higher indigenous procurement and export incentives.
Companies involved in industrial machinery, auto ancillaries, and specialised manufacturing are also part of the watchlist. Axis notes that any extension or expansion of PLI schemes, or fresh incentives for high-value manufacturing, could act as a catalyst for these stocks.
Consumption and Rural-Focused Stocks
While capex has dominated recent budgets, consumption cannot be ignored—especially with elections and employment generation in focus. Axis Securities expects Budget 2026 to include measures that support rural income, agriculture-linked infrastructure, and targeted welfare schemes.
As a result, select FMCG, consumer durables, and agri-input companies feature in the 26-stock list. These stocks are positioned to benefit from improved rural sentiment, better monsoons, and policy support aimed at enhancing purchasing power at the grassroots level.
Energy, Power, and Green Transition
Another notable theme in Axis’ picks is energy—both conventional and renewable. Power generation, transmission, and distribution companies could gain from increased budgetary allocations for grid expansion and energy security.
At the same time, renewable energy, green hydrogen, and energy storage are emerging as long-term focus areas. Axis believes that companies aligned with India’s energy transition goals stand to benefit from policy continuity and increased government spending in this space.
What Investors Should Keep in Mind
Axis Securities cautions investors against chasing knee-jerk budget-day moves. While February 1 often triggers sharp intraday swings, the real opportunity lies in identifying stocks aligned with long-term policy direction and earnings visibility.
The brokerage’s 26-stock list is intended as a watchlist rather than a trading call. Investors are advised to assess valuations, risk appetite, and time horizon before making investment decisions. Budget announcements can create sentiment-driven rallies, but sustainable wealth creation typically follows companies that deliver consistent execution and cash flows.
The Bottom Line
Budget 2026 is expected to reinforce the government’s commitment to growth through infrastructure, manufacturing, and targeted consumption support. Axis Securities’ 26 stock picks reflect a blend of cyclical and structural opportunities, offering exposure to sectors that could benefit both immediately and over the medium to long term.
As February 1 approaches, these stocks are likely to remain in focus, not just for budget-day volatility but for what they represent—a roadmap of where policy support and economic momentum may converge in the year ahead.
