India’s capital goods industry is expected to experience a revenue growth of 12-14% in the current fiscal year. This growth is fueled by continuous government expenditure and expansion in sectors like power, mining, oil and gas, metal, and auto-related industries. Additionally, emerging segments such as data centers and electric vehicle infrastructure are providing new opportunities for growth.
The ongoing developments in West Asia are unlikely to significantly impact this growth due to diversified order books and limited exposure to the region. Most of the revenue is generated from the domestic market, providing a cushion against external disruptions. The operating margin is anticipated to remain stable at 12-13% this fiscal year, supported by efficient execution and strong client relationships.
Large companies in the industry have seen a 1.5 times increase in their order books over the past two fiscal years, reaching Rs 5.2 lakh crore as of December 2025. The book-to-bill ratio has also improved to 3.7 times in fiscal 2026 from 3.1 times in fiscal 2024. The growth is primarily driven by increased capital expenditure in the power sector, which now holds a 50% share, up from 32%.
Capital goods companies are expected to report a revenue growth of 12-14% this fiscal year, driven by substantial growth in capital expenditure across the power sector, especially in the renewable energy value chain. The report highlights increased government spending in sectors like railways and defense, with respective capex allocations rising by 11% and 5% this fiscal year.
Power capacity additions of 58-62 gigawatts are projected for this fiscal year, primarily led by renewables, which will boost demand for heavy engineering and equipment. Transmission capital expenditure is expected to remain robust, driven by renewable integration, growing demand, and grid modernization efforts. Railway and defense capex are also set to increase, focusing on expansion, modernization, and indigenization.
