New Delhi: The Union Budget 2026–27 strengthened medium-term earnings visibility for sectors aligned with public capex and policy priorities, even though earnings recovery will take time, a report said on Wednesday.
The report from small case managers said the Budget opened “actionable opportunities across defence ecosystems, manufacturing linked businesses, logistics, select auto and ancillaries, energy transition themes and innovation led pharmaceuticals.”
The report said sharp market reactions came to selective measures such as changes in derivatives taxation and argued that Budget’s deeper signals point to continuity in capital formation, strategic manufacturing and defence led expansion.
The investment platform noted the recently announced India–US trade agreement as a positive development, adding that oil and gas, clean technology, nuclear energy, rare earths, data centres and artificial intelligence are top sectors to benefit from the deal.
Divam Sharma, smallcase manager and CEO & co founder of Green Portfolio, said many investors are experiencing their “first prolonged phase of weak earnings and subdued sentiment”.
“Indian markets are no longer in an ultra-high growth phase. Nominal GDP growth has settled closer to 10 per cent, which is a sign of maturity—not stress,” Sharma said.
Valuation resets and drawdowns, especially in small caps, are consistent with historical market behaviour and should be viewed as part of a longer wealth-creation cycle rather than a breakdown of the India story, Sharma added.
Regarding Budget’s sectoral priorities, Shashank Udupa, smallcase Manager and SEBI-registered Research Analyst said, “Budget allocations point to intent, not optics. The sharp increase in defence capital outlay—across land systems, aircraft, engines, heavy vehicles and R&D—clearly shows this is not a one-year push.”
Budget allocations point to “building capability, ecosystems and domestic scale,” Udupa added.
He also pointed to higher spending on pharmaceuticals, biopharma research, chemical parks and coal gasification as evidence that the government is addressing both innovation and energy security.
The report flagged that renewed interest in gold, shortages in critical metals and persistent commodity inflation suggest global markets are entering a new structural phase, rather than just another short-term market cycle.
(IANS)
