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We expect our Industrial coverage universe 1QFY26 revenue to grow by c.11.8% YoY driven by strong opening orderbook and demand. Factoring stable commodity prices and execution mix, EBITDA margin for most of the companies are expected to expand YoY (except for AIA, Cummins and ideaForge which is expected to decline on a high base and change in revenue mix). On the order inflow front, we believe domestic ordering prospects remain strong from sectors such as Defence, Data Centre, T&D, Power, Railways, Renewables, etc. The sequential growth momentum in domestic genset volume is likely to continue. Overall export markets are expected to improve on sequential basis, however current geopolitical issues will be key monitorable. We remain positive on the sector, factoring in continued push by the government on infrastructure development and making India a manufacturing hub.

* Momentum in defence to continue: We expect BEL to report revenue growth of 16.1% YoY, (opening order book of INR 716bn); EBITDA margin is expected to be healthy at 22.5%, (up 20bps YoY). BEL reported order inflows of INR 73bn in 1QFY26 (FY26 order inflow guidance stands at INR 270bn, excluding QRSAM order). For Data Patterns, we expect revenue to grow 14.4% YoY aided by revenue booking for spill over from last 2-3 quarters. EBITDA margin is likely to expand 80bps YoY to 36.5% driven by operating leverage. Product offtake by customers will be a key monitorable.

* Mining consumables: Within Mining consumables we expect AIAE to report YoY decline in volume and realisation, factoring in, destocking at customer end, delay in customer conversion, supply chain constraints and declining ferro chrome prices. Resulting in revenue decline of 6.7% YoY and EBITDA margins declining 180bps YoY. While, Tega is expected to report revenue growth of c.17.7% YoY, factoring 40% YoY growth in Equipment business on low base and consumable segment growing 15% YoY, aided by revenue booking of 4QFY25 revenue spill over. Margins expansion will be largely due to positive margins in equipment business vs loss YoY.

* Diesel genset on recovery path post emission norms changes: Genset players like Cummins and KOEL are expected to see recovery in genset volumes on a sequential basis, and further recovery in volume is expected, going forward. Revenue is likely to be supported by volume growth, stable pricing in powergen segment, continued traction in industrial segment and exports picking up sequentially for Cummins. Management commentary on genset demand scenario pick-up and export outlook will be a key monitorable.

* Other Industrials: Techno-electric growth will be driven by strong opening order book for T&D segment, execution of Railtel data centre order. Order prospects for Techno are strong, especially in the T&D sector. Management commentary on data centre commissioning and status on client on-boarding will be a key monitorable during the quarter. ideaForge will continue to report disappointing numbers due to lower opening order book, delay in order finalisation of L1 orders and muted ordering activity. Revenue for ideaForge will be driven by run rate business. However in 1QFY26 ideaForge has won orders worth INR 1.4bn, which will drive revenue from 1HFY26. Management commentary on ordering activity will be a key monitorable.

* Continue to maintain positive outlook: We maintain our positive stance on the sector given government-led infrastructure capex, continued growth momentum in data centres, PLI scheme-led capex in multiple sectors, focus on defence product localisation and pickup in private sector capex (data centres, renewables, cement, steel, etc.).

* JM Top pick: Our top pick is BEL

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