Defence, capital goods set to drive India’s capex revival: Report

India’s capital expenditure (capex) cycle is showing early but credible signs of revival, with several sectors poised to benefit significantly over the next two to three years, according to the India Equity Strategy 2026 report by Antique Stock Broking , a leading Indian firm providing market insights and equity research.

The report highlights that improving macroeconomic conditions, strong policy support, and rising private and household investments are creating the foundation for a broad-based capex recovery.

Among the biggest beneficiaries is the defence sector. With higher budgetary allocations, a robust order pipeline, and the government’s continued push for indigenisation under the Atmanirbhar Bharat programme, defence manufacturers are seeing multi-year revenue visibility. Export opportunities are also expanding, offering an additional growth lever.

The capital goods sector is expected to witness outsized earnings growth as fresh orders coincide with high operating leverage. Companies in this space, with capacity utilisation above long-term averages, could see sharp profit expansion even with modest revenue growth. Corrected valuations in parts of the sector are also enhancing the risk-reward potential, the report noted.

Industrial and electronics manufacturing services (EMS) are another key beneficiary. The “ China+1 ” global supply-chain strategy, where companies diversify production beyond China to reduce risk, is positioning India as a preferred manufacturing hub, driving sustained demand for industrial equipment, electronics, and automation-linked services.

While public capex continues to provide support, the report points to a gradual return of private investment as a critical driver. Infrastructure developers, construction companies, and engineering players involved in roads, railways, power, and urban infrastructure stand to gain the most from this shift.

Housing demand is also on the rise, supported by lower interest rates, improved affordability, and higher household investment. This, in turn, is expected to benefit real estate developers and building material companies, such as cement and construction inputs, which generally accelerate once execution picks up.

Overall, the report suggests that India’s capex revival is gaining traction across sectors, with defence, capital goods, industrial manufacturing, and construction-related segments leading the charge.