Autobayng News Team
The report noted that order books of large capital goods companies have increased nearly 1.5 times over the past two fiscals to ₹5.2 lakh crore as of December 2025.“>
India’s capital goods sector is expected to maintain a double-digit revenue growth of 12-14 per cent in the financial year 2026-27 (FY27), supported by sustained government spending, rising investments in power and infrastructure sectors, and healthy order books, according to Crisil Ratings.
It said growth momentum is likely to remain similar to last fiscal despite external geopolitical headwinds, aided by steady capacity expansion in sectors such as power, mining, oil and gas, metals and automobiles, along with emerging opportunities in electric vehicle infrastructure and data centres.
The analysis has covered 66 companies engaged in manufacturing heavy electricals, mining machinery and process plant equipment showed aggregate revenue of around ₹2.1 lakh crore in FY25, representing nearly half of the industry.
The report noted that order books of large capital goods companies have increased nearly 1.5 times over the past two fiscals to ₹5.2 lakh crore as of December 2025. The sector’s book-to-bill ratio improved to around 3.7 times in FY26 from 3.1 times in FY24, driven mainly by rising power sector investments.
Aditya Jhaver, Director at Crisil Ratings, said the sector is expected to benefit from strong double-digit capex growth in the power segment, particularly renewable energy, alongside increased government spending in railways and defence.
According to the report, railway capital expenditure is expected to recover on the back of network expansion and modernisation, while defence spending continues to rise with a focus on indigenisation. Private sector investments in steel, cement and oil and gas are also expected to remain stable due to healthy domestic demand.
Power capacity additions of 58-62 GW in FY27, led by renewable energy, are expected to boost demand for heavy engineering and equipment, while transmission capex will remain strong due to renewable integration and grid modernisation initiatives.
Joanne Gonsalves, Associate Director at Crisil Ratings, said the credit outlook for the sector remains stable due to healthy cash flows, low leverage and moderate capital expenditure plans. Debt-to-EBITDA for rated capital goods companies is projected at around 0.8 times while interest coverage is expected to remain comfortable at nearly 11 times during FY27.
The report, however, cautioned that any sharp rise in commodity and freight prices due to prolonged geopolitical tensions could delay capex spending by industries and the government, potentially impacting growth and profitability.
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