Amid expectations that policy uncertainty will likely abate gradually with tariffs settling at lower levels, brokerage firm Nirmal Bang has listed out its sectors-wise top stock picks after factoring in both micro, and macro economic factors that would set the tone for FY26.

Sector-Wise Performance Expectations And Preferred Stocks

Banking: "We expect recent fiscal and monetary easing to support consumption  revival and drive a modest recovery in loan growth NIMs may see divergent trends across banks depending on their respective business  mix," according to the brokerage house.

Buy: SBI and City Union Bank

IT - Some certainty in macro factors to play out in 2026 with enterprises  hoping to start spending toward innovation and edge. Expect  discretionary spending and short-term projects to remain muted. Gen AI  projects are now picking up with scale and likely to escalate in 2026, triggering pent-up demand as well as new scope of work.

Buy: TCS and Coforge

Consumer: On the staples side, rural demand is expected to continue outperforming  urban demand, supported by improving farm economics, government  support measures and better income visibility in rural markets. Alco-Bev  companies remain our preferred sectoral bets, while QSRs are likely to  face higher competitive intensity and margin pressure due to the  expanding convenience-led food delivery ecosystem and rising local  competition.

Buy: United Spirits and United Breweries

Automobile & Auto Ancillaries: FY26 is emerging as a turnaround year for the auto sector, following the  moderation seen in FY25 and 1HFY26. Over the medium term, demand  recovery should be supported by pay commission revisions, GST 2.0-led  affordability, income-tax cuts, and lower interest rates, though growth is  expected to remain selective.

Buy: M&M and Eicher

Defence: India’s capabilities in defence have transitioned from being import  oriented to making significant stride toward indigenization either through  in-house R&D or Transfer of Technology with friendly nations. India aims  to further expand to a Rs3tn production and Rs500bn export target by  2029, reflecting policy support and long-term demand visibility.

Buy: Hindustan Aeronautics Limited and Solar Industries