6 Best Capital Goods Stocks in India to Follow Up

Best Capital Goods Stocks

The capital goods sector forms the foundation of a country’s industrial strength. It includes heavy machinery, tools, construction equipment, turbines, transmission towers, machine tools, and other equipment necessary for the production of goods and services. In India, the capital goods industry plays a pivotal role in propelling infrastructure development, power generation, transportation, and manufacturing capabilities. With India’s renewed push toward industrial growth, digital infrastructure, and energy transition, the capital goods sector is witnessing significant tailwinds.

Capital Goods Industry

Indian Capital Goods Industry Market Size and Forecast

• As of 2025, the Indian Capital Goods Industry generated a turnover of approximately US$115 billion.
• The sector contributes around 1.8% of India’s GDP and 12% of total manufacturing output.
• The Indian Capital Goods Industry is expected to grow with a 10 – 15% CAGR from 2025 to 2030, driven by infrastructure investments, industrial automation, and renewable energy deployment.

Global Capital Goods Industry Market Size and Forecast

• In 2023, the global capital goods market stood at approximately US$3.25 trillion, though revenue growth contracted slightly in 2024.
• 2025 is expected to witness a recovery with 4% growth, with North America and Asia-Pacific leading the momentum.
• By 2028, the global market is projected to surpass US$3.4 trillion.

Key Growth Drivers for capital good industry

i. Infrastructure Development & Urbanization

• The National Infrastructure Pipeline (NIP) aims to spend INR 111 lakh crore (~US$1.78 trillion) from 2020–25 across energy, transport, urban, and rural sectors.
• The construction of highways, metro systems, ports, and smart cities is significantly boosting demand for capital equipment.
• The Union Budget 2025-26 has earmarked a significant ₹11.21 lakh crore (which is approximately 3.1% of GDP) for capital expenditure.

ii. Renewable Energy & Power Transmission

• The Indian government has set a target of 500 GW of non-fossil fuel capacity by 2030.
• An estimated INR 25 lakh crore (~US$300 billion) in investments are expected over five years in power generation, transmission, and storage.
• Current Status (as of March 31, 2025): India’s total installed renewable energy (RE) capacity reached 220.10 GW.
• High-voltage transmission equipment, solar and wind turbine components, and storage units are in high demand.

iii. Defence & Railways Modernization

• The defence budget for 2024 witnessed a 10% increase, and railway Capex rose by 28%.
• Indigenous production under Aatmanirbhar Bharat is creating demand for domestic machinery, arms, and rolling stock manufacturing.
• India’s defense budget for FY 2025-26 is ₹6,81,210 crore (approximately US$ 78.57 billion). This marks a 9.5% increase from the previous year’s budgetary estimate.
• The Union Budget 2025-26 allocated ₹2.65 lakh crore for Indian Railways. This includes ₹2.52 lakh crore from general revenues, ₹200 crore from the Nirbhaya Fund, ₹3,000 crore from internal resources, and ₹10,000 crore from extra-budgetary resources.

iv. Manufacturing Automation & Industry 4.0

• The drive towards smart manufacturing, robotics, and digital twins is creating a boom in factory automation equipment.
• Sectors like automotive, pharma, and electronics are increasing automation investments.

v. Emerging Sectors: EVs & Data Centres

• EV-related infrastructure (battery plants, charging stations) is increasing the need for specialized machinery.
• India’s data centre capacity is expected to double by FY27, fueling growth in HVAC, power systems, and related capital goods.

Competitive Landscape capital good industry

Major Indian Players in capital goods stocks:

• Larsen & Toubro (L&T) – among the large cap capital goods stocks the company is into Power transmission, rail, defense engineering.
• BHEL is into Power equipment, turbines, electrical infrastructure. The company is one of the best capital goods stocks in large cap segment.
• Thermax is one of my favorite capital goods stocks that is into Boilers, water treatment, process heating.
• Triveni Turbines – Small steam turbines.
• ABB India, Siemens India – Industrial automation, electrification are a few other capital goods stocks in India to look for in large cap segment.

5 Best Capital Goods Stocks in Mid-cap and Small Cap Category

Eimco Elecon (India)

The company is a leading manufacturer of underground mining equipment, headquartered in Vallabh Vidyanagar, Gujarat. It operates in the industrial equipment sector and caters primarily to the mining and infrastructure industries.

• Primary Segment: Underground mining equipment manufacturing and related services.
• Product Range: Equipment for coal and metalliferous mining.
• Service Component: After-sales service, spare parts, and refurbishment of equipment.

The business model is B2B, catering to the government (Coal India subsidiaries), large private mining companies, and infrastructure EPC players.

Turnover Trend:

• FY21: ₹125.8 Cr
• FY22: ₹84.4 Cr (impacted due to delayed orders and supply chain issues)
• FY24: ₹227.5 Cr (highest in 10 years)

The expected revival of underground coal mining in India, supported by government policy to open up commercial mining, is a potential inflection point. Eimco’s legacy and ready product portfolio give it a first-mover advantage.

CG Power and Industrial Solutions Ltd.,

This company has been a part of the Murugappa Group since 2020 and is an 86-year-old engineering conglomerate headquartered in Mumbai. The company is a market leader in industrial and power systems, serving both domestic and international markets.

The company committed ₹662 crore capex over FY23–FY25 for the below products fully funded from internal accruals.

• Motors: Ahmednagar, Goa
• Transformers: Bhopal, Malanpur
• Switchgear: Nashik

Business Verticals:

1. Industrial Systems – Motors, Drives, Railways, and Fast-Moving Electrical Goods (FMEG)
2. Power Systems – Transformers, Switchgear, GIS Substations, EHV/MV Products

New Segment: Semiconductor OSAT (Assembly & Testing) – Sanand, Gujarat

• FY24 Revenue (Standalone): ₹7,610 crore | Growth: +16% YoY
• Consolidated Revenue: ₹8,046 crore
• Exports: Currently ~5% of revenue, targeted to grow to 20% in 4–5 years

Key Sectors Served:

• Power Transmission & Distribution
• Railways, Metros
• Data Centers, Green Hydrogen, Renewable Energy
• Oil & Gas, Steel, Cement, Water, IT/Telecom

New Business: Semiconductor OSAT Facility

• ₹7,600 crore investment in JV (CG holds 92.34%)
• Located in Sanand, Gujarat
• Target: Advanced and legacy chip packaging (BGA, CSP)
• Capacity: 15 million units/day
• Backed by GoI Semiconductor Policy incentives

Windsor Machines Ltd.

The company is a leading Indian manufacturer of plastic processing machinery, with over 60 years of industry experience and presence in more than 65 countries. Headquartered in Thane, Maharashtra, it is listed on BSE and NSE under the ticker “WINDMACHIN.”

Core Business Segments:

1. Injection Moulding Machines (IMM)
2. Pipe Extrusion Lines
3. Blown Film Co-Extrusion Lines

Legacy & Scale:

• Over 30,000 machines are installed globally.
• Clients span household products, packaging, automotive, infrastructure, and medical sectors.

Business Segments:

• IMM: High-volume, high-precision molding systems. Flagship series: Excel, Sprint, KL.
• Pipe Extrusion: Single and twin-screw machines for HDPE, CPVC, and other polymer pipes.
• Blown Film Lines: Multi-layer film extrusion machines for packaging.

Revenue estimated for FY24 ₹~470 Cr, for the year FY23 the company reported revenue of ₹448 Cr, and for FY22 the revenue reported was ₹409 Cr.

The company exports to 65+ countries including the USA, Europe, Middle East, Africa, and Southeast Asia.

Capex, Capacity & Globalization

• Investments in CNC facilities at Vatva, Gujarat to boost productivity.
• Developed India’s largest injection molding machines: KL 1600, KL 2000, KL 2300.
• Strengthening global footprint with exports to EU, SEA, and Latin America.

However, in a recent move, promoters are selling their stake in the market. Promoters have reduced their shareholding in the company from 58.5% in March 2023 to 44.5% in March 2025.

Kirloskar Oil Engines: One of the Best Capital Goods Stocks

A leading Indian manufacturer of engines, gensets, water management solutions, and farm mechanization equipment. Known for its technological leadership, strong brand equity (KOEL Green, KOEL iGreen), and focus on fuel-agnostic and sustainable solutions. The company is one of the best capital goods stocks in India.

B2B Business:

1. Power Generation (Gensets) – 2.8 kVA to 3000 kVA; across segments such as data centers, telecom, healthcare, and realty.
2. Industrial Engines – For sectors like railways, marine, oil & gas, and construction.
3. Defence & Marine – Custom-engineered power solutions.

B2C Business:

4. Water Management Solutions – Diesel and electric pumpsets, motors, pipes, cables.
5. Farm Mechanisation – Tillers, weeders, brush cutters, and other agri tools.
6. Distribution & Aftermarket – Spare parts, lubricants, batteries, service support.

Financial Performance

• Revenue FY24: ₹4,806 crore (up 18% YoY from ₹4,073 crore in FY23).
• PAT FY24: ₹362 crore (up 34% YoY).
• Exports: Focused expansion, ~32% export share from LGM plant; new strategic acquisitions in the U.S.
• Strengthening global presence in North America (via Engines LPG LLC) and MENA regions (GOEM partnership).

Capex, M&A, Capacity Expansion

• Acquisition of La Gajjar Machineries and Engines LPG LLC (USA) for backward/forward integration and export growth.
• Prestigious ₹768 Cr order from Nuclear Power Corporation of India (NPCIL) for 6.3 MW gensets.

R&D, New Products & Innovations

• The entire CPCB IV+ compliant genset range was developed in-house—the first in India to get a complete certification.
• Fuel-agnostic engine roadmap: Natural gas, ethanol, methanol, hydrogen, Hythane.
• R&D investments in fuel cells, battery hybrid gensets, solar & microgrids.
• New OptiPrime gensets (1000, 1500, 2020 kVA) for HHP segment.

Kirloskar Oil Engines Ltd. (KOEL) is undergoing a strategic transformation from a legacy industrial manufacturer into a technology-driven, sustainable energy solutions provider. The company’s proactive CPCB IV+ compliance, early investments in alternate fuels and electrification, and export-focused M&A strategy place it in a strong position for the next phase of growth. Strong financials, prudent leadership, and a clear growth vision support long-term investment potential.

You may be interested in “Chemical stocks in India the next big opportunity“

HPL Electric & Power One of Best Capital Goods Stocks

HPL Electric & Power Ltd. is one of India’s leading manufacturers of low-voltage electrical equipment and smart metering solutions, serving both domestic and global markets. The company is one of the best capital goods stocks in India. The company focuses on innovation, sustainability, and smart energy management.

Its diversified offerings include:

• Smart & conventional meters
• Switchgear
• Lighting products
• Wires & cables
• Solar and EV infrastructure components

HPL has seven manufacturing facilities and exports to 42+ countries.

The company operates under two redefined segments:

1. Metering, Systems & Services (B2B)

• Includes smart meters, conventional meters, AMI systems
• Primary customers: utilities, government contracts, and DISCOMs

2. Consumer, Industrial & Services (B2C)

• Includes switchgear, wires & cables, lighting, fans
• Customers: residential, commercial, and industrial retail market

FY24 Financial Performance:

• Revenue: ₹1,460.86 Cr (up 15.7% YoY)
• EBITDA: ₹192.15 Cr (up 22.5% YoY, margin at 13.2%)
• PAT: ₹43.63 Cr (up 44.2% YoY)
• EPS: ₹6.78 (up 44.5%)

Segment Revenue (FY24):

• Metering, Systems & Services: ₹852.6 Cr (↑27.25%) — 59% of revenue
• Consumer, Industrial & Services: ₹608.3 Cr (↑2.7%)

Order Book (as of May 2024):

• ₹2,000+ Cr; 88% from Metering segment

Export Presence:

• Certified for 53+ international markets, a strong presence in MENA, Africa, and Southeast Asia

HPL Electric & Power Ltd. is at the cusp of significant growth driven by smart grid transformation, Make-in-India tailwinds, and its expanding export and product footprint. With its focus on smart meters, high-margin product segments, and capacity-backed execution, the company has strong visibility for sustained revenue growth, operating leverage, and ROCE improvement. The company is one of the best capital goods stocks in India.

Key Strengths:

• ₹2,000+ Cr order book
• Industry-wide recognized product certification.
• Government-aligned growth themes (Smart Cities, RDSS, EV, Solar, 5G)
• Vertical integration and domestic component manufacturing in the pipeline
• Intends to double retail network from 45,000 to 100,000 outlets in 2 years
• Focused on high-value product segments (smart meters, switchgear, wires)
• Expect smart meter and 5G infra to be long-term growth levers

Skipper Limited One of the Best Capital goods stocks

Founded in 1981, Skipper Limited is India’s largest and the world’s only integrated manufacturer of transmission and distribution (T&D) structures with full in-house capabilities across the value chain — from angle rolling to tower testing and EPC execution. It operates in three core sectors:

• Engineering (T&D structures, monopoles, telecom towers, railway electrification)
• Infrastructure EPC (power, telecom, rail, water)
• Polymer products (pipes, tanks, fittings)

The company exports to 54+ countries, with manufacturing hubs across West Bengal and Assam.

Business Segments

1. Engineering Products (76% of revenue, FY23)

• Transmission towers, poles, telecom towers, monopoles, fasteners
• Largest T&D tower supplier to PGCIL
• In-house DSIR-approved R&D and India’s largest tower testing station

2. Polymer Products (21%)

• CPVC/UPVC/SWR/HDPE pipes and fittings
• Largest PVC pipe manufacturer in Eastern India
• Presence in 30,000+ retail touchpoints

3. Infrastructure Projects (3%)

• Turnkey EPC for transmission, telecom, railway electrification, and water
• Executing large-scale BSNL tower deployment projects under the IaaSP model

FY24 Financial Snapshot:

• Revenue: ₹3,282 Cr (↑66% YoY from ₹1,980 Cr in FY23)
• PAT: ₹81.7 Cr (↑129%)
• EBITDA: ₹319.4 Cr (↑66%; margin stable at 9.7%)
• Order book: ₹6,215 Cr (vs. ₹4,551 Cr in FY23) — all-time high
• Export sales: ₹635 Cr in FY24 (↓12% YoY), but 13% of the total order book

Global Presence:

• Strong exports to Africa, MENA, North & South America, Southeast Asia, Australia
• First Indian firm to design and supply 765 KV transmission monopoles to North America

Capex, M&A, Capacity Expansions

• Expanding engineering capacity by 75,000 MTPA to reach 375,000 MTPA
• Capex of ₹200 Cr (~FY25) to support export-led and EPC growth
• Rights issue of ₹200 Cr completed in FY24 to support balance sheet and Capex

Skipper Limited has built a formidable foundation as a diversified, integrated manufacturer in the infrastructure value chain, with a strong base in T&D engineering and a rising profile in polymer and EPC segments. The company is one of the best capital goods stocks in India.

The company is leveraged to India’s infrastructure push (power, water, telecom, rail) and is entering a multi-year growth cycle supported by a record order book, export credibility, capacity expansion, and cost efficiencies.

The company has strong visibility for the next 2–3 years (Order book 2.2x of Engineering revenue), focus on bottom-line expansion, working capital optimization, and deleveraging

The company will also benefit from:

• 500 GW RE integration (by 2030)
• 250 million smart meters
• ₹2.4 trillion in transmission infrastructure investments
• Nationwide 5G tower rollout (8–12 lakh new towers)
• Jal Jeevan Mission & AMRUT (water infra)

HPL is one of my favorite capital goods stocks to look for long-term growth. The company is one of the best capital goods stocks in India.

Final words on capital goods stocks

The BSE Capital Goods Index has returned over 78% in the past 12 months (as of mid-2024). Valuations remain attractive relative to growth potential, especially in mid-cap capital goods firms.

India’s capital goods sector is entering a golden growth phase, catalyzed by robust infrastructure spending, green energy transition, rising defense indigenization, and smart manufacturing. With government policy support and global realignments favoring India as a manufacturing destination, capital goods stocks are primed for sustained growth over the next decade.