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India’s capital goods sector is witnessing a significant resurgence, with strong order inflows and robust execution growth expected to define 2025. The sector is benefiting from increased investments in renewable energy, thermal power, and data centers, alongside government-led infrastructure projects.

Key Sector Highlights:

* Order Inflows: Although FY25’s election-driven slowdown affected early order inflows, Q4FY25 is expected to witness a robust rebound.

* Execution Growth: The sector is projected to achieve 19% YoY growth in execution, fueled by ongoing projects in core industries.

* Margins Stability: Favorable commodity prices are helping maintain stable margins across the industry.

Growth Catalysts:

* Government Capex: Increased government spending on infrastructure, railways, and defense continues to provide a strong foundation for the sector’s growth.

* Defense Indigenization: Policies promoting self-reliance in defense manufacturing are driving demand for capital goods.

* Private Sector Participation: Rising private investments in sectors like data centers and renewable energy are creating new opportunities.

Outlook for 2025:

The capital goods sector is set for a strong year ahead, with execution growth and margin stability underpinning its performance. Companies in the sector are well-positioned to leverage government policies and private investments, ensuring sustained growth in the medium to long term.

India’s capital goods story is one of resilience and innovation, with players across the spectrum ready to capitalize on the opportunities presented by a rapidly evolving economic landscape.

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