Order inflows are expected to show healthy momentum this quarter. CG Power and Industrial Solutions is likely to stand out with a 27% year-on-year (YoY) rise in new orders. It will be followed by Hitachi Energy India, which could report 17.8% YoY growth.
Siemens is also expected to post an 11% increase in order inflows, while ABB India may see steady progress. On the other hand, Thermax could record a decline of about 11%, and BHEL might report a sharper fall of 29%, partly due to legacy order challenges.
Revenues across most capital goods companies are expected to remain strong, backed by order backlogs. Broad-based growth is anticipated across the sector.
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CG Power is likely to take the lead with around 36% growth, while BHEL and Hitachi Energy are projected to grow by 19–20%. Other players such as Cummins India, ABB, Siemens, and Thermax are expected to report mid- to high-single-digit growth.
Margins are expected to vary significantly across companies. Hitachi Energy may report a strong 500-basis-point expansion, while CG Power, Cummins, and Siemens could see smaller gains of 60–90 basis points.
However, ABB, Thermax, and BHEL might face margin pressure this quarter due to higher commodity costs and project-related challenges, especially in BHEL’s legacy projects.
Overall, Q2FY26 is shaping up to be a mixed quarter — supported by a strong order book, cost rationalisation, and moderating commodity inflation. Execution efficiency, private capex momentum, and the impact of a prolonged monsoon on engineering, procurement, and construction (EPC) activities will be key factors to watch.
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Valuations across the sector have moderated from peak levels, reflecting slower order inflows and reduced capex spending. Despite this, CG Power and Hitachi Energy continue to trade at premium valuations, though even these have eased from earlier highs.
According to Harshit Kapadia, VP–Industrial, Defence, Railway, Consumer, Electrical, Durables, Electronics at Elara Capital, the second half of 2025-26 (FY26) could bring increased competition, particularly from Chinese manufacturers.
Kapadia’s top picks include KEC International, Siemens Energy, Hitachi Energy, and KEI Industries. He also holds a positive view on Praj Industries, Kalpataru Power, and Apar Industries.
Discussing large multinational corporations like ABB India and Siemens India, Kapadia stated that much of their business now depends on private capex, which remains muted. However, he pointed to a potential major trigger for Siemens India — a large upcoming tender to fully air-condition Mumbai’s local trains, expected by the end of the third quarter.
For the entire interview, watch the accompanying video
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