Capital Goods – Jul-Sep’25 Earnings Preview – T&D driven healthy execution despite tariff impacting project finalizations
Published on 07 Oct 2025
We expect our capital goods coverage universe to report mixed performance in Q2FY26 owing to the 1) T&D driven healthy execution across project and select product companies, 2) recent geopolitical incidents leading to better tendering and execution of robust order books of defence companies, 3) cautious exports and tariff related uncertainties leading to order finalization and dispatch related delays for industrial machinery companies, and 4) continued weakness in the consumable companies. Overall, we expect revenue/EBITDA growth of ~14.7%/14.8% YoY (~13.0%/13.8% YoY ex-L&T). Tariff related uncertainties leading to delayed order finalizations impacting export business of many of our coverage companies along with execution pace and domestic capex momentum will remain key monitorables. Our top picks are Kirloskar Pneumatic, Voltamp Transformers, Hindustan Aeronautics and Larsen & Toubro.
