Capital Goods – Sector Update – Wired for Growth, Priced for Opportunity
Published on 26 Oct 2026
We remain constructive on the structural outlook for the capital goods sector, with our current preference centered on transmission & distribution (T&D) and data center-linked power infrastructure. Both themes are supported by multi-year investment requirements, rising power demand and the need for reliable electricity supply. Following the recent correction in stock prices, we see an opportunity to increase exposure to companies where long-term earnings visibility remains intact, despite near-term cost pressures and global uncertainties. However, we expect gradual price hikes and pass-throughs to mitigate the near-term impact. Accordingly, we favor companies with strong order books, differentiated technological capabilities, capacity to execute incremental demand, and visible earnings growth. Our preferred picks are GVTD (maintain ‘BUY’), KKC (upgrade to ‘BUY’), and VAMP (upgrade ‘BUY’). We believe the recent correction has improved the risk-reward profile of these stocks, offering an opportunity to participate in India’s multi-year power infrastructure, and data center investment cycle.
