The Union Budget 2026 has brought a mix of reactions across various sectors, with some emerging as clear winners while others face challenges. Here's a detailed analysis of the top winners and losers based on insights from CLSA and UBS.
Top Winners
Consumer Sector
Urban Consumption Boost: Both CLSA and UBS highlight that the reduction in personal income tax slabs will significantly benefit urban consumption. Key beneficiaries include companies like Zomato, Swiggy, DMart, Titan, and various quick-service restaurants (QSRs) such as RBA, Jubilant, WLDL, and Devyani. Within consumer staples, urban-focused companies like Nestle, Britannia, Varun Beverages, and Tata Consumer are expected to see positive impacts.
Healthcare for Gig Workers: CLSA notes that the provision of healthcare for 10 million gig workers is a positive development for companies like Zomato and Swiggy.
Automotive Sector
Boost from Income Tax Cuts: UBS and CLSA both agree that the income tax cuts will drive demand for two-wheelers (2Ws) and passenger vehicles (PVs). This is particularly beneficial for urban-focused segments like scooters, 125cc motorcycles, and entry-to-mid segment cars. Key beneficiaries include Maruti Suzuki (MSIL), Hyundai (HMIL), Mahindra & Mahindra (M&M), Tata Motors (TTMT), Bajaj Auto (BJAUT), Hero MotoCorp (HMCL), Eicher Motors (EIM), and TVS Motor Company (TVSL)
Insurance Sector
Increased FDI Limit: CLSA highlights that the increase in the FDI limit for the insurance sector to 100% is a significant development. This change allows foreign insurers to enter the Indian market without a local partner, potentially increasing competition.
Pharmaceutical Sector
Increase in Medical Seats: UBS points out that the addition of 10,000 medical seats in FY26 and a total of 75,000 seats over the next five years will lead to more prescribers and higher volume growth for Indian formulations, benefiting the pharmaceutical sector.
Top Losers
Rural Consumption
Limited Support: CLSA notes that the budget has limited announcements to boost rural consumption, which is negative for companies like Hindustan Unilever that have a significant rural market presence.
IT Sector
Slightly Negative Impact: According to CLSA, the budget's support for setting up Global Capability Centers (GCCs) in Tier-2 cities is slightly negative for the Indian IT sector. This move could divert potential market share from Indian IT companies to GCCs.
India Energy
CLSA highlights that the budget did not announce any subsidy for LPG losses incurred by oil marketing companies like IOC, BPCL, and HPCL. This is a significant negative for these companies, which have faced substantial under-recoveries
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