New Delhi: India’s capital goods industry is projected to see a revenue growth of 12-14 per cent this fiscal, buoyed by sustained government spending, steady capacity expansion in power, mining, oil and gas, metal and auto-linked sectors, and increasing opportunities from emerging segments such as data centres and electric vehicle (EV) infrastructure, a report showed on Friday.
The ongoing developments in West Asia are unlikely to materially impact growth as diversified order books and limited regional exposure to the middle east provide a cushion with revenue largely accruing from the domestic market, said the Crisil report.
“The operating margin is expected to remain range-bound at 12-13 per cent this fiscal, supported by strong execution, long-term client relationships and improved operating leverage despite geopolitical cost pressure,” it added.
The order books of large companies have risen 1.5 times over the past two fiscals to Rs 5.2 lakh crore (as of December 2025) with the book-to-bill ratio improving to 3.7 times in fiscal 2026 from 3.1 times in fiscal 2024.
The growth is driven by increased power sector capex, raising its share to 50 per cent from 32 per cent, alongside steady growth in defence and railways outlays.
“We expect capital goods companies to report revenue growth of 12-14 per cent this fiscal, driven by strong double-digit growth in capex spends across the power sector, particularly the renewable energy value chain. Growth is further supported by increased government spending in key sectors such as railways and defence, where capex allocations this fiscal have risen 11 per cent and 5 per cent, respectively,” said Aditya Jhaver, Director, Crisil Ratings.
According to the report, power capacity additions of 58–62 gigawatt (GW) this fiscal, led by renewables, should boost demand for heavy engineering and equipment. Transmission capex is expected to stay strong, driven by renewable integration, rising demand and grid modernisation.
“Railway capex is set to recover, supported by expansion and modernisation, while defence spending continues to rise with a focus on indigenisation. Private capex in core sectors such as steel, cement and oil and gas remains steady, driven by steady domestic demand even as emerging areas such as data centres and EV infrastructure gain traction,” the report noted.
(IANS)
