Capital Goods Sector Sees Strong Buying Momentum in 2026

The BSE Capital Goods index has rebounded by 3.5% in less than two months, driven by a strong rally in select stocks from the capital goods space. Hitachi Energy, Apar Industries, and ABB India are among the top performers, with a 33%, 34%, and 14% jump in 2026, respectively.

Key Factors Contributing to the Rally

• Record capex announced in the Union Budget 2026 has boosted sentiment in the sector.
• India-US and India-EU trade deals have improved the export outlook for companies.
• Softening of commodity prices has improved the margin outlook.
• Strong results from companies such as Hitachi Energy and Apar Industries have triggered buying momentum.

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Individual Stock Performances

• Hitachi Energy has seen a 33% jump in 2026, with a major acceleration following the release of its December quarter numbers.
• Apar Industries has risen 34% in February so far, contributing to a 28% jump year-to-date.
• Astral has seen its shares rise to a fresh 52-week high, leading to an 18% spike in 2026.
• GE Vernova T&D India has delivered an 18% return so far, building on a 51% rally in the previous year.
• Supreme Industries has made a strong comeback, rising 17% so far and recovering over half of the 29% losses registered in 2025.

Broking Firm's Outlook

• Motilal Oswal has a selective stance on the sector, preferring companies with strong execution growth and the ability to sustain margins amid commodity volatility.
• The brokerage firm has maintained its positive stance on L&T, Cummins India, and Siemens Energy in the large-cap space, and Kirloskar Oil Engines and Kalpataru Projects International in the mid- and small-cap segments.
• In the defence sector, Bharat Heavy Electricals remains Motilal Oswal's top pick.

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