Engineering, procurement and construction (EPC) players have been severely affected by the ongoing conflict, with Larsen & Toubro (L&T) facing estimated revenue losses of ₹5,000 crore, KEC International losing ₹400 crore, and Kalpataru Projects experiencing ₹190 crore in losses due to project delays. According to reports from Business Standard, most companies were unable to pass through commodity inflation and currency-related pressures in Q4FY26, leading to margin compression across the sector. Despite these challenges, companies such as Bharat Heavy Electricals (BHEL), Siemens, Cummins and ABB India continue to see strong order inflows, indicating momentum in private-sector capital expenditure.
The government achieved 98 per cent of its revised FY26 capex target, spending ₹10.8 trillion against the revised estimate of ₹11 trillion, with the FY27 target set at ₹12.3 trillion. As reported by Business Standard, demand is broad-based across infrastructure, residential real estate, quick commerce, mining, food and beverages, pharmaceuticals, and data centres. The transmission and distribution (T&D) sector has seen momentum due to renewable energy integration driving investments in transmission lines, transformer capacity and grid-stability solutions. The annual bidding pipeline is estimated at ₹1 trillion across intra-state transmission projects.
Data centres remain a major growth theme, driving demand across multiple categories including power-generation turbines, speciality cables, transformers, chillers and cooling towers, and modular skids for data-centre infrastructure. According to Business Standard, data centres present an opportunity of ₹50–100 crore per project, with distribution and electrification players such as Siemens, ABB and Schneider Electric potentially capturing 10–20 per cent of data-centre capex. The backup-power segment is dominated by Cummins, while Thermax (chillers and cooling towers), CG Power, Hitachi Energy, Siemens Energy and GE Vernova T&D India are other beneficiaries.
L&T missed its 15 per cent revenue-growth target for FY26 due to the Middle East conflict and delays in water-related projects, but has guided for 10–12 per cent growth in order inflows and revenue for FY27 with stable core EBITDA margins at 7.8 per cent. Praj Industries said greenfield fuel-ethanol ordering may gain momentum as higher blending mandates are implemented, while the company has delayed enquiries worth ₹300 crore due to raw-material cost visibility requirements. Triveni Turbine reported that its enquiry pipeline has more than doubled over the past year, with an overall pipeline of 18 GW.
Valuations remain elevated at around 20–25 per cent above the 10-year average for many stocks in the capital goods sector. According to Business Standard, analysts remain broadly bullish but have become more selective, with earnings downgrades issued in several cases. The T&D cycle has multi-year momentum driven by rising power consumption, increasing summer peak load, renewable-energy transition and grid modernisation. While structural demand could persist for years, near-term ordering may be deferred unless there is a resolution to the ongoing US-Iran conflict, which remains the key concern affecting the sector's near-term performance.
