Capital Goods – Oct-Dec’25 Earnings Preview – T&D & defense driven healthy execution; prolonged tariffs continue to impact order finalizations
Published on 07 Jan 2026
We expect our capital goods coverage universe to report mixed performance in Q3FY26 owing to 1) healthy execution momentum across T&D-led projects and product companies, 2) improved execution of robust backlogs in defense companies along with strong order visibility supported by geopolitical tensions and recent DAC AoN approvals, 3) sluggishness in export-oriented businesses due to likely delays in dispatches and order finalization on account of tariff and geopolitics-related uncertainties, and 4) continued softness in consumables companies. Overall, we expect Q3FY26 revenue/EBITDA growth of ~14.9%/19.5% YoY (~13.1%/16.5% YoY ex-L&T) driven by healthy execution in T&D related and defense companies. Execution pace, order inflows (OIs), expected pickup in private capex led by taxation and labor policy reforms along with the impact of tariffs and geopolitical tensions on exports businesses of our coverage companies, will remain key monitorables. Our top picks are Hindustan Aeronautics, Larsen & Toubro, GE Vernova T&D India and Voltamp Transformers.
