Rising Wires: Performance of Electrical & Industrial Technology in India's Capital Goods Sector

Overview

The 'Capital Goods - Electricals & Industrial Technology' sector is crucial in influencing India's economic growth as a basis for infrastructure, manufacturing, and energy initiatives. 

Capital Goods industry includes firms which are engaged in the manufacturing of electrical machinery, industrial equipment, automation technologies, and power-related items. It contributes around 12% to India's manufacturing sector and around 2% to India's GDP, thus remaining important to the country's industrial growth and modernization.

 

Recent Performance

During the first quarter of FY2025, the industry recorded strong revenue expansion of 19% on average year over year. The expansion was primarily led by sustained demand across power transmission, renewable energy, and infrastructure growth.

 

Challenges

In spite of its advantages, the industry has significant challenges. 

• Most subsectors are underutilized because delayed project implementations and modest domestic demand have kept them underutilized.

• Increased global competition and surging input costs compress profit margins and price plans. 

• Lack of skilled talent for high-tech manufacturing and new technology.

• Policy barriers, including inflexible procurement procedures and slow uptake of indigenous manufacturing, may also limit the growth of the sector.

Investment Potential

Investors find this sector attractive due to stable government spending commitments, policy support, and a substantial pipeline of infrastructure projects. Growth in private investments in automation, electric vehicle infrastructure, and smart manufacturing augments this potential. The increased incorporation of Industry 4.0 tools gives space for innovation-fueled expansion. Financial markets reflect this optimism, with the BSE Capital Goods Index rising over 77% in the last year, emphasizing the robust investor interest.

 

Strategic Government Initiatives

India's Capital Goods industry, especially electrical and industrial technology, has seen tremendous growth, doubling production from Rs.2.29 lakh crore in 2014-15 to Rs.4.29 lakh crore in 2023-24 i.e. approximately 1.9% of the GDP. The industry fuels large-scale infrastructure and manufacturing operations, supplemented by government programs such as the Make in India initiative and National Capital Goods Policy to enhance domestic production and exports.

The 2025-26 Union Budget also favors the industry by waiving customs duties on other capital goods for the manufacture of electric vehicles and mobile phone batteries, promoting local production of lithium-ion batteries. Government initiatives in the area of skill development, upgradation of technology, and industry-academic partnership have boosted innovation and competitiveness.

 

Future Outlook

Industry commentators forecast the sector expanding at a healthy 9-11% during the FY 2025, driven by firm government spending in railways, highways, renewable energy, and defense. Furthermore, private sector investments, along with initiatives like the Production-Linked Incentive (PLI), smart city schemes, and energy transition initiatives, will contribute to growth further. Emerging tech in electric vehicles, digital infrastructure, and data centers are also expected to contribute a higher percentage of the industry's revenue by 2028 than they do today. The electrical equipment market is expected to grow to USD 130 billion by 2030, with growth supported by electrification and clean energy trends.

 

Company Overview

ABB India Limited

ABB India is a leading technology-driven company with a focus on electrification, robotics, automation, and digitalization. Founded in 1949 and with headquarters in Bengaluru, the group serves industries like energy, manufacturing, and infrastructure. ABB India recorded good numbers in Q2 2025 with a 12% increase in revenue and, for the first time, an over Rs.10,000 crore order backlog. The firm also declared an interim dividend of Rs.9.77 a share, while maintaining double-digit margins for the 11th consecutive quarter. Its share price, at around Rs.5,100–Rs.5,140, has been resilient despite currency headwinds, thanks to good fundamentals and its leadership role in propelling India's industrial growth and automation journey.

 

Siemens Limited

Siemens India has a key role in industrial automation and heavy electrical equipment businesses, which cater to mission-critical sectors such as power generation, distribution, and smart infrastructure. In Q1 2025, the company reported a 65% year-on-year profit before tax increase to Rs.445.40 crore, the highest in the previous five quarters. Profit after tax, though, fell 9.9%, in line with operational challenges. Earnings per share improved to Rs.11.88, also a multi-quarter high, reflecting better returns for shareholders. While profitability was short-term constrained, Siemens continues to consolidate its order pipeline and enlarge its digital solutions portfolio, cementing its position as a reliable technology leader in the Indian market.

 

 

Havells India Limited

Havells India, well known within the electrical and consumer durables segment, has established a robust multi-brand portfolio, including Lloyd. The company is diversified across switchgear, cables, home appliances, and lighting. During Q4 FY2025, it reported 20.2% revenue growth, spearheaded by a phenomenal 39.54% increase in the Lloyd business. Segment-wise revenue was Rs.2,169 crore from cables, Rs.996 crore from electrical durables, and Rs.691 crore from switchgear. Profit before tax increased 17.4% to Rs.706 crore, and EBITDA expanded 19.5% to Rs.761 crore. Technical indications show sustained bullish strength, with weekly crossovers suggesting potential 6%+ upside, supported by market faith in the diversified growth model of the company.

 

 

Q1 FY26 Key Metrics Comparison: ABB India vs. Siemens vs. Havells India

Below is a detailed comparative analysis of Q1 FY26 key metrics for ABB India, Siemens India, and Havells India

 

ABB India Limited

Sales grew more than 12% due to consistent project execution, while net profits declined by over 20%, driven by declining margins and increased costs. The sales growth for the ABB India is in good health, although the sales growth weakened during the quarter. ABB is still at the forefront of electrification and automation but must do better on profit stability in the future.

Siemens Limited

Siemens reported the strongest sales expansion among the three, with sales rising more than 15%. Still, profit after tax fell by nearly 27% due primarily to higher operating costs. Siemens maintains a good order book and is working on digital and smart infrastructure projects, which may help in an earnings recovery. Margins were flat, though EPS fell significantly.

Havells India Limited

Havells' revenue fell by 6% due mostly to softer demand for cooling products caused by more favorable weather conditions. Profitability also fell, net profit fell by 14%, and margins contracted but remained in proximity to double digits. Expansion in the cables business helped to cushion some of the loss in consumer units. Cost reductions and strategic investments mitigated the effect of lower profits.

 

Investment Insights

Siemens takes the lead in expansion, followed by ABB and Havells. But Havells saw a decline due to seasonality affecting consumer demand.

All three companies suffered from decreased profits with sector-wide margin stress and cost pressures.

While ABB and Siemens have healthy sales growth driving future expansion, Havells hopes on recovery in consumer expenditures and sustained industrial demand.

In sum, ABB and Siemens offer growth potential based on infrastructure and digitalization themes, while Havells could offer growth potential with a pick-up in consumer markets.

This detailed overview charts the significant financial performance and future prospects of these three industry leaders in India's capital goods and electrical space during Q1 FY26.

 

Conclusion

India's Capital Goods – Electricals & Industrial Technology segment is a pillar of modernization, reflecting sturdy revenue growth with margin issues and rising international competition. Ongoing government support, tech-driven improvement, and rising private investment will help drive more sustainable growth for this important industrial sector.

 

Frequently Asked Questions

What is the contribution of the Capital Goods sector to India’s economy?

It accounts for about 12% of India’s manufacturing sector and nearly 2% of the nation’s GDP.

 

What drove the sector’s revenue growth in early FY2025?

Strong demand in power transmission, renewable energy, and infrastructure projects pushed revenues up by 19% year-over-year.

 

What are the biggest challenges faced by this industry?

Underutilized capacity, intense global competition, rising input costs, and scarcity of skilled labor present persistent barriers.

 

Why is this sector attractive for investment?

Stable government spending, expanding infrastructure projects, and strong policy support underpin robust investor interest.

 

What is the growth outlook for this sector through 2028?

The industry is projected to grow at 9–11% annually, with emerging technologies and government initiatives accelerating expansion.

Disclaimer:  This blog is dedicated exclusively for educational purposes. Please note that the securities and investments mentioned here are provided for informative purposes only and should not be construed as recommendations. Kindly ensure thorough research prior to making any investment decisions. Participation in the securities market carries inherent risks, and it's important to carefully review all associated documents before committing to investments. Please be aware that the attainment of investment objectives is not guaranteed. It's important to note that the past performance of securities and instruments does not reliably predict future performance.