India’s capital expenditure cycle is displaying early signs of a comeback, indicating potential growth in sectors tied to investment spending over the next few years. The India Equity Strategy 2026 report by Antique Stock Broking highlights improving economic conditions, policy support, and increased investments by companies and households as factors laying the groundwork for a broad capex recovery. This resurgence extends beyond government spending, with private investments gradually resurfacing.
The defence sector is anticipated to be a major beneficiary of the capex drive, supported by higher budget allocations, a robust order pipeline, and the government’s emphasis on indigenisation through the Atmanirbhar Bharat program. Enhanced revenue visibility for defence companies is expected for several years, fueled by growing export opportunities. Capital goods firms are also poised for substantial earnings growth.
With new orders on the rise and high operating leverage, even slight revenue upticks could translate into significant profit increases, especially as factories are operating above average capacity levels. Furthermore, attractive valuations in certain segments are enhancing investment appeal. Industrial and electronics manufacturing services providers stand to gain from both domestic capex and global supply chain realignments.
As global companies seek to diversify away from China with the “China+1” strategy, India is emerging as a preferred manufacturing hub, benefiting industrial equipment, electronics, and automation-related services. The report underscores the positive shift towards private investment alongside ongoing government infrastructure spending, which is expected to bolster infrastructure developers, construction firms, and engineering companies, particularly those involved in roads, railways, power projects, and urban infrastructure.
The revival of housing demand, supported by lower interest rates, increased affordability, and rising household investments, is set to benefit real estate developers, cement manufacturers, and construction input suppliers. While these segments typically see growth later in the capex cycle, they tend to experience rapid expansion once project execution gains momentum.
