Best Capital Goods Stocks in India to Invest in 2026

India aspires to be a truly developed economy by 20247 under the ‘Viksit Bharat’ narrative. Thus, the capital goods sector is a cornerstone of its infra & industrial growth. Capital goods involve machinery/equipment/tools necessary for production in various industrial & infrastructure sectors, like in the construction of transport infra (road, railway lines, bridges etc), utilities (power/energy, water supply etc) and various military applications.

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The Indian government –BOTH Federal and state remain focused on developing traditional and social infrastructure with a multiyear plan for a CAPEX of around ₹20 trillion every year, along with the PPP (Public-Private participation) mode. India, a country of almost 1.5 billion people, needs a massive infra push on an ongoing basis from modern railways (HSR/SHSR) to quality education & healthcare sectors.

Thus, the outlook for capital goods sector-related stocks continues to be robust in 2026.

India’s nominal GDP is expected to grow around 10-12% vs real GDP 6-7% in the next five years (2026-30) amid resilient domestic consumption, revitalised private CAPEX (investments), solid government consumption & CAPEX.

The government's continued stress on creating world-class infra through the mission of National Infrastructure Pipeline, increasing focus on renewable energy (RE), military (defence), electronics & smart manufacturing are some of the key tailwinds.

India’s capital goods sector is poised to grow at around 15% CAGR for the next few years on average, in line with nominal GDP growth and export potential.

The capital goods sector is cyclical (economic boom & bust), and may also be affected by Trump's tariff tantrum. But the Indian government’s structural & incremental policy & process reforms and increasing public & private investments are also ensuring a sustainable domestic demand for capital goods in the years ahead.

India is now among the world’s top five economies (in terms of nominal GDP) and comparable to China in terms of its population. Thus, India has to ensure a proper industrial & logistical ecosystem, comparable to China, to serve its huge population for ease of doing business, travelling, and logistics ecosystem to quality inclusive employment and sustainable price stability.

In brief, India, a developing & the fastest growing economy among its peers, also has to improve its overall economic productivity/efficacy above real GDP growth. Only then can India be a truly developed economy, as under such a scenario, incremental economic growth will not result in incremental inflation.

Thus the capital goods sector continues to be a part & parcel of India’s structural growth story.

Why should investors continue to invest in the Capital Goods sector in 2026?

The capital goods sector contributes significantly to India’s economic growth narrative. Overall revenue growth is projected to be around 10% in the next few years, in line with the expected growth in nominal GDP.

The capital goods sector may be fuelled by various targeted fiscal and monetary stimulus, like PLI (Production-Linked Incentives/subsidies) schemes and an infra push.

Some of the key drivers & challenges may be:

• Government’s thrust on Infra Capex: Sustained investment in roads, railways, ports, and urban development.
• Private Sector Revival in CAPEX: Improving policy reforms, higher consumer demand & corporate earnings resulting in higher capacity utilisation above 75% in many Indian producers.
• Focus on Renewable Energy (RE) and Defence/Military applications: Shift towards RE and self-reliance (Make in India), especially in strategic sectors like Military equipment is boosting demand.
• Robust pipeline of various infra projects in India may be around ₹20 trillion for FY:27 (Federal + States)
• Export Potential: Indian firms gaining global space amid China +One narrative by the West (as a reliable supplier & a democracy)

But, despite various challenges, both internal & external- India’s domestically oriented companies are expected to outperform amid earnings visibility from multi-year order books- providing long-term stability.

Here are some of the top (blue chip) companies in the Capital Goods sector (large/mid-caps), selected based on market leadership, order books, financial health, and alignment with India’s growth stories:

1) Larsen & Toubro Ltd (L&T)

• L&T is India's top engineering, procurement & construction (EPC) blue chip.
• Huge & robust order book of around ₹6.0 trillion led by government infra projects (road and railways, including metros).
• Diversified portfolio across infra, power, hydrocarbons, military and tech services.
• A key beneficiary of India’s infra CAPEX supercycle, ensuring strong & timely execution reliability.
• Increasing global expansion led by the Middle East (ME)-Saudi Arabia, UAE, Qatar, Oman and Kuwait.

L&T-Technical Chart

2) Siemens Ltd

• A leader in India’s railway electrification, high-tech industrial automation, and smart infrastructure.
• Digitilisation-increasing adoption & applications of its DI Xcelerator digital marketplace-for automation and AI solutions.
• Favoured for its dominance in industrial automation, smart infrastructure, and mobility techs.
• Plays a key role in India's smart cities concept and renewable energy (RE) initiatives line with India’s long-term aspiration to be a developed economy by 2047.
• Innovation in energy-efficient technologies.
• With demand for automation rising, Siemens is a premium pick for long-term growth.
• Average order book around ₹0.20 trillion/year; present backlog ~₹0.42 trillion.
• Expected to begin the execution of 1200 new electric locomotives for Indian Railways (Freight-9000 HP) worth ~₹0.13 trillion, around 30% of its current backlog.
• Portfolio restructuring/de-risking from low margin segments (like Low voltage motors) to focus on higher margin digital & RE.
• Challenges-need to convert its huge backlog orders into actual revenue & profits more efficiently.

Technical Chart-Siemens

3) ABB India Ltd

• A key provider of robotics and energy efficiency solutions for the ongoing transformation of Indian utilities.
• A leader in industrial digitalisation.
• Specialises in electrification, robotics, and industrial automation.
• Focus on sustainable solutions aligning with India's green energy goals.
• Proven resilience across various economic & CAPEX cycles.

ABB-Technical Chart

4) Bharat Heavy Electricals Ltd (BHEL)

• A major public sector (PSU) player in thermal power generation and transmission equipment; BHEL is pivotal for India's energy sector.
• Revival in power projects and renewables (RE) could drive order inflows.
• Despite past challenges, improving asset quality and government support make it a value play, a turnaround story led by the highest ever order book (₹2.2 trillion) with a renewed focus on execution & diversifications into RE.

BHEL-Technical Chart

5) Thermax Ltd

• Excels in energy & environment solutions, including boilers, heaters, and water treatment.
• Focus on sustainable technologies positions it for growth in renewables (RE) and industrial heating.
• Strong margins and innovation in green solutions are key strengths.

THERMAX-Technical Chart

Other notables may be HAL, BEL, Cummins India (engines and power solutions), Suzlon Energy (wind turbines), and Havells India (electrical equipment), which offer exposure to diverse capital goods sub-segments and potential multibaggers in 2026.

Conclusion

India’s Capital Goods (CG) sector is set for a promising 2026 amid the goal of ‘Developed India’ by 2047, coupled with the ‘Make in India’ theme. Blue-chip stocks like L&T, Siemens, ABB, and Bhel stand out for their respective leadership and revenue visibility.

The Capital Goods sectors & sub-sectors should shine in the coming years in line with the ‘Shining India’ theme.