Capital Goods Stocks in India

Capital goods stocks refer to shares of companies involved in producing and supplying machinery, tools, and infrastructure required by other industries to manufacture their products and services.
Capital Goods Stocks to Invest in India
3 min
11-June-2025

Capital Goods Stocks in India represent companies engaged in manufacturing machinery, tools, and equipment essential for producing other goods and services. These firms cater to sectors like infrastructure, power, defence, construction, and heavy engineering. Unlike consumer goods, capital goods are not consumed directly but are used to support long-term industrial growth. The performance of these stocks is closely tied to economic cycles, policy reforms, and industrial demand. Capital Goods Stocks in India are vital for infrastructure development and are often considered by long-term investors seeking exposure to India’s manufacturing and growth story. They also reflect the pace of industrialisation and economic progress.

List of capital goods stocks in India

Check out this capital goods stocks list based on market capitalisation:

Company Name Market Capitalisation (Rs.)
Larsen & Toubro Ltd 2,40,000 crore
Adani Ports and Special Economic Zone Ltd 1,70,000 crore
Hindustan Aeronautics Ltd 1,10,000 crore
Siemens Ltd 1,30,000 crore
ABB India Ltd 51,000 Crore
Eicher Motors Ltd 79,000 Crore
Havells India Ltd 87,000 Crore
Cummins India Ltd 46,000 Crore
Polycab India Ltd 61,000 Crore
Mazagon Dock Shipbuilders Ltd 22,000 Crore


Disclaimer: The market capitalisation values mentioned above are subject to change based on market conditions, company performance, and economic trends. For the latest and most accurate market capitalisation figures, please refer to official sources such as the SEBI or the respective stock exchanges.

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Overview of capital goods

Here’s an overview of companies that are listed as capital goods sector stocks

1. Larsen & Toubro Ltd

Larsen & Toubro (L&T) is one of India’s largest and most well-established engineering conglomerates. Known for its expertise in construction, engineering, and technology services, L&T’s stock is a cornerstone of the capital goods sector. The company has a diversified portfolio, including construction, defence, power, and IT services, making it resilient in various market conditions. L&T is also a major player in public-private partnership (PPP) projects, contributing significantly to India’s infrastructure growth. With a robust order book and consistent revenue generation, L&T offers long-term growth potential, making it an ideal investment for those looking to gain exposure to India’s infrastructure boom.

2. Adani Ports and Special Economic Zone Ltd

Adani Ports and Special Economic Zone Ltd (APSEZ) is India’s largest private sector port operator. With a substantial presence in the logistics and transport sectors, APSEZ plays a pivotal role in India’s industrial supply chain. The company operates several key ports and special economic zones across the country, which are essential for global trade. APSEZ’s growth is driven by increasing trade volumes, government initiatives, and its robust infrastructure development. The company’s steady expansion and ability to manage large-scale projects make it an attractive stock for investors seeking exposure to the transportation and logistics sectors within India.

3. Hindustan Aeronautics Ltd

Hindustan Aeronautics Ltd (HAL) is a state-owned aerospace and defence company that manufactures aircraft, helicopters, and avionics. It is crucial to India’s defence industry and is responsible for producing and assembling the country’s advanced defence systems. HAL’s focus on innovation and technology, coupled with strategic partnerships with global aerospace companies, positions it well for long-term growth. As India continues to invest heavily in defence and aerospace sectors, HAL’s stock is poised for continued growth. Investors seeking to gain exposure to the Indian defence sector often turn to HAL as a reliable long-term investment.

4. Siemens Ltd

Siemens Ltd is a leading global technology company providing solutions in sectors such as energy, healthcare, infrastructure, and industry. The company’s product range includes automation systems, electrical and energy-efficient solutions, and industrial software. Siemens Ltd benefits from its wide reach, strong technological innovation, and strategic investments in smart infrastructure and sustainable energy. With India’s push for green energy and digitisation, Siemens is well-positioned to capitalise on emerging trends such as renewable energy, smart cities, and automation. Investors can expect Siemens to continue its growth trajectory due to its leadership in critical technological sectors.

5. ABB India Ltd

ABB India Ltd is part of the global ABB Group and provides electrification, automation, and digital solutions across various sectors, including utilities, industries, and transport. ABB India is a leader in electrical distribution and industrial automation, offering innovative products and solutions that increase productivity and energy efficiency. The company’s focus on automation and green energy solutions aligns with India’s growing emphasis on renewable energy and smart infrastructure. ABB’s robust technological portfolio, coupled with India’s increasing demand for automation and power solutions, makes it an attractive stock for long-term investors.

6. Eicher Motors Ltd

Eicher Motors Ltd is a leading manufacturer of automobiles, including commercial vehicles and two-wheelers. The company is best known for its premium motorcycles, especially the Royal Enfield brand. Eicher Motors has successfully navigated the growing demand for both premium motorcycles and commercial vehicles, making it a significant player in India’s transportation sector. With strong brand recognition, a growing international footprint, and continued innovations, Eicher Motors has substantial growth potential. The company’s consistent performance and diversified product range offer investors an opportunity to participate in both the automotive and commercial vehicle sectors.

7. Havells India Ltd

Havells India Ltd is a leading player in the electrical goods industry, offering products ranging from electrical appliances and lighting to power distribution and automation equipment. The company is known for its focus on innovation, quality, and sustainability. With India’s growing demand for electrical products due to rapid urbanisation, increased industrialisation, and infrastructure development, Havells stands to benefit significantly from these trends. The company’s strong distribution network, commitment to innovation, and increasing demand for energy-efficient solutions make it a strong stock in the capital goods sector.

8. Cummins India Ltd

Cummins India Ltd is part of the global Cummins Inc. and specialises in manufacturing diesel and natural gas engines. Cummins India’s engines are used in a wide range of applications, including power generation, construction, and industrial machinery. The company is well-positioned to capitalise on India’s growing demand for energy solutions, particularly in the form of backup power systems. With a strong market presence, Cummins India continues to innovate and expand its product range. Investors seeking exposure to the energy sector and looking for a stable growth opportunity should consider Cummins India as a viable option.

9. Polycab India Ltd

Polycab India Ltd is a leading manufacturer of wires, cables, and electrical solutions, serving a broad range of industries, including construction, infrastructure, and energy. The company has established a reputation for high-quality, durable electrical products that are essential for infrastructure projects. With the growing need for reliable electrical distribution systems in India’s urbanisation and infrastructure development, Polycab’s stock is expected to continue its upward trajectory. The company’s consistent revenue growth, strong distribution channels, and market leadership position make it an attractive investment in the capital goods space.

10. Mazagon Dock Shipbuilders Ltd

Mazagon Dock Shipbuilders Ltd (MDL) is a prominent shipbuilding company that designs, manufactures, and repairs warships and submarines for the Indian Navy. With India’s increasing focus on strengthening its naval capabilities, MDL is set to benefit from a growing order book and strategic defence initiatives. As a key player in India’s defence sector, MDL’s prospects remain strong due to its specialised capabilities in shipbuilding and naval construction. Investors with an interest in the defence sector can find Mazagon Dock Shipbuilders to be a promising long-term investment option.

Why invest in capital goods stocks?

  • Economic growth: Capital goods sectors are essential for driving infrastructure and industrial growth.
  • Rising demand: Rapid urbanisation and industrialisation in India lead to increased demand for capital goods.
  • Diversification: These stocks help diversify portfolios by tapping into sectors like construction, energy, and defence.
  • Long-term growth: Capital goods companies offer long-term growth opportunities due to their integral role in development.
  • Exposure to key sectors: Investing allows exposure to core sectors that fuel economic expansion in India.

How to invest in capital goods stocks?

  • Research & analysis: Begin by researching companies with strong financial health and growth prospects.
  • Stock exchanges: Capital goods stocks are available on the NSE and BSE, which investors can access directly.
  • Diversification via funds: Consider mutual funds or ETFs that focus on the capital goods sector.
  • Market position: Evaluate a company’s market position and past performance to gauge its future growth.
  • Professional guidance: Seek advice from brokers or financial planners for informed investment decisions.

Features of capital goods stocks

  • Cyclical nature: Capital goods stocks are tied to economic cycles, thriving during growth phases but facing challenges in downturns.
  • Long-term projects: These companies are involved in large-scale projects, such as infrastructure development and industrial production.
  • Diverse sectors: Capital goods span various industries like construction, energy, aerospace, and technology, offering investment diversity.
  • Steady cash flows: They often generate consistent cash flows, appealing to long-term investors seeking stability and regular returns.
  • Economic drivers: As vital contributors to economic growth, capital goods stocks play a significant role in development and expansion.

Who should invest in capital goods stocks?

  • Long-term investors: Ideal for those seeking growth tied to infrastructure and industrial development.
  • Risk tolerance: Suitable for investors who can handle market volatility and economic fluctuations.
  • Diversification seekers: Investors looking to add exposure to core sectors like construction, energy, and defence.
  • Economic growth enthusiasts: Those interested in benefiting from India’s rapid urbanisation and industrialisation.
  • Cautious investors: Not recommended for individuals with a short-term investment horizon or low-risk tolerance.

Factors affecting capital goods stocks

  • Economic growth: Strong economic expansion boosts demand for capital goods and supports stock prices.
  • Government policies: Infrastructure spending and reforms can significantly impact the performance of these stocks.
  • Raw material costs: Fluctuations in prices of essential materials, like steel and copper, influence production costs.
  • Interest rates & inflation: Changes in monetary policy and inflation rates affect capital goods stock valuations.
  • Global trade dynamics: International trade conditions and supply chain disruptions can influence sector performance.

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Advantages of investing in capital goods stocks

  • Exposure to key sectors: These stocks provide access to industries like infrastructure, defence, energy, and manufacturing.
  • Long-term growth potential: India’s urbanisation and industrialisation provide significant growth opportunities.
  • Stable returns: Capital goods stocks tend to offer steady cash flows and long-term returns.
  • Inflation hedge: Demand for capital goods products remains consistent, protecting against inflationary pressures.
  • Strategic advantage: With careful research, these stocks can deliver strong returns and portfolio diversification.

Risks of investing in capital goods stocks

  • Economic cycles: These stocks are highly sensitive to economic downturns and recessions.
  • Policy risks: Regulatory changes or government spending cuts can impact capital goods companies negatively.
  • Commodity price fluctuations: Rising raw material costs can erode profit margins and affect stock performance.
  • Market volatility: Investors need to navigate through price swings influenced by external economic factors.
  • Diversification necessity: To mitigate risk, investors should diversify their portfolios across sectors and asset classes.

Conclusion

Capital goods stocks play a vital role in driving economic growth and development, making them an attractive investment option for long-term investors. Companies in this sector benefit from ongoing infrastructure development and industrialisation, offering substantial growth potential. However, investors should carefully consider the risks involved, including economic fluctuations and regulatory changes. By staying informed, diversifying their investments, and focusing on long-term growth, investors can tap into the opportunities offered by capital goods stocks while managing potential risks effectively.

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Frequently asked questions

What are capital goods in stock?

Capital goods in stock are shares of companies that produce machinery, tools, and equipment used in manufacturing and infrastructure. These firms support sectors like energy, transport, and construction. By enabling industrial output and innovation, capital goods stocks play a crucial role in economic growth and appeal to long-term investors.

Is it a good time to invest in capital goods stocks?
It depends on market conditions and individual financial goals. Given India's rapid urbanisation and infrastructure development, capital goods stocks have long-term growth potential. However, economic cycles can impact their performance. Investors should assess factors like government policies, infrastructure spending, and global trade conditions. Consulting a financial advisor can help determine if capital goods stocks align with your investment strategy and risk tolerance at the moment.

How can I invest in capital goods stocks?
To invest in capital goods stocks, you can buy shares directly through the National Stock Exchange (NSE) or Bombay Stock Exchange (BSE). Alternatively, you can invest via mutual funds or exchange-traded funds (ETFs) focused on the capital goods sector for diversification. Conduct thorough research on companies' performance, market positioning, and financial health. Consulting a financial advisor can provide expert guidance to make informed investment decisions.

Why are capital goods stocks falling?

Capital goods stocks may fall due to reduced infrastructure spending, project delays, or weak industrial output. Global economic slowdowns, rising input costs, and policy uncertainties can also affect demand. Investor sentiment may decline if earnings underperform or if capital expenditure from the government and private sector contracts.

What is capital stock with an example?

Capital stock refers to the total amount of physical goods a company uses in production, like buildings, machinery, or tools. For example, a car manufacturing firm’s capital stock includes its assembly lines, welding machines, and production equipment—assets that help produce vehicles but are not part of the final product.

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