Budget 2026: Infrastructure Takes Center Stage as Sitharaman Prepares for Economic Resilience
All eyes are firmly set on Finance Minister Nirmala Sitharaman as she prepares to present the Union Budget for the financial year 2026–27 on Sunday, February 1. The budget is widely anticipated to feature a substantial increase in infrastructure spending, aimed at spurring economic growth, generating employment, and providing a cushion against challenges posed by US tariffs and global uncertainties.
Building on a Record Foundation
In the previous Budget 2025, the Finance Minister allocated a record ₹11.21 lakh crore for India's infrastructure needs, marking an increase from the prior year's ₹11.11 lakh crore. For the upcoming financial year, experts are projecting a significant 10-15% rise in government capital expenditure, potentially reaching ₹12 to 12.5 lakh crore.
Vinit Bolinjkar, Head of Research at Ventura, emphasized the critical role of infrastructure in the budget. "Infrastructure will be the key theme in the Union Budget 2026. Every ₹1 spent on infrastructure yields a GDP impact of ₹3, making it crucial for long-term resilience. A 10-15% increase in government capex to ₹12-12.5 lakh crore is projected. This includes a potential ₹25,000 crore fund to revive stalled infrastructure projects, benefiting sectors like highways and urban development," he stated.
Key Expectations and Strategic Initiatives
Bolinjkar expects sustained growth in capital expenditure and anticipates the launch of National Infrastructure Pipeline (NIP) 2.0. "The launch of an updated infrastructure pipeline covering 2026-2032 (successor of NIP 2020-25), potentially scaling up from the original ₹111 lakh crore plan to address emerging needs like high-speed rail and logistics corridors, is expected," he explained.
The government is also likely to offer clarity on plans to monetize ₹10 lakh crore in sick PSU land banks through FY30. According to Bolinjkar, this initiative could significantly enhance construction activity on these land banks and boost ordering activities. Furthermore, financing innovations such as green bonds, credit enhancement for bond markets, and land-value capture as formal tools are expected to improve credit access and fund flow.
Top Infrastructure Stocks for Long-Term Investment
With expectations of a stronger focus on the infrastructure sector, Bolinjkar recommends five infrastructure stocks for long-term investment, positioning them as potential major beneficiaries of the government's infrastructure push.
- Larsen & Toubro (L&T) | Target Price: ₹4,849
- Entering a high-growth phase with a record order book of ₹7,332 billion (30% YoY growth).
- Robust pipeline of ₹5.92 trillion driven by CarbonLite Solutions and Precision Engineering.
- Improved net working capital to revenue ratio at 8.2%.
- Management confident in exceeding initial order inflow guidance and reaffirming revenue growth targets.
- NBCC | Target Price: ₹167
- Unique asset-light model with a massive order book of ₹1.28 lakh crore.
- Quasi-monopoly in government redevelopment projects, handling 76% of GPRA projects in Delhi.
- Zero-debt balance sheet funded by internal accruals and customer advances.
- Primary beneficiary of PSU land bank monetization plan.
- IRB Infrastructure | Target Price: ₹87
- 44% market share in TOT space and 10% contribution to national toll revenue.
- Manages asset base of ₹94,000 crore across 13 states.
- Uses Infrastructure Investment Trusts (InvITs) to optimize balance sheet.
- Supported by global investors like GIC Singapore and Ferrovial Group.
- Interarch Building Solutions | Target Price: ₹2,633
- Second-largest player in India's PEB sector, positioned for market growth to ₹47,000 crore by 2033.
- Backlog of ₹1634 crore, aiming to scale to over ₹2000 crore.
- High repeat order ratio of 81% with clients like Asian Paints and Unilever.
- Debt-free with plans to increase manufacturing capacity to 200,000 MTPA by FY28.
- HCC | Target Price: ₹64
- Renewal phase with massive project pipeline and successful debt resolution.
- Built 60% of India's nuclear power capacity and 26% of hydro power capacity.
- Order book of ₹13,152 crore diversified across transportation, hydro, and water sectors.
- Plans to reduce debt by ₹900 crore in FY26 through internal accruals and rights issue.
Disclaimer: This story is for educational purposes only. The views, stock recommendations, and investment rationale expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
