Budget 2026: Not Game-Changing, But Key for Foreign Capital - HDFC's Varun Lohchab

• HDFC Securities' Varun Lohchab expects Union Budget 2026 to maintain the government's growth and fiscal discipline stance, avoiding radical reforms.
• The budget is seen as a crucial anchor for attracting foreign capital, with FIIs watching tax stability, regulatory predictability, capex focus, and fiscal discipline.
• RBI is unlikely to cut rates in February despite subdued inflation; focus will be on liquidity measures and transmission of past rate cuts.
• Manufacturing, capex, railways, renewable power, infrastructure, and defence manufacturing are expected to receive improved budgetary allocations and new PLI announcements.
• Strong corporate earnings growth, particularly 12%+ in FY27, is crucial for sustained market strength, with Nifty potentially seeing 5-10% upside next year.

Why It Matters: Budget 2026 will prioritize fiscal discipline and growth, acting as a vital magnet for foreign investment.