Capital goods companies expected to post 9-11% revenue growth rate in FY25

Capital goods companies are expected to achieve 9-11% revenue growth rate in FY25 on the back of government’s capex push compared 13% growth in FY 24.

“Capital goods makers are likely to see revenue rise by 9-11% in fiscal 2025, led by continued significant outlays towards railways (including metros), defence, conventional and renewable sectors”, a Crisil report said.l Monday.

In fiscal 2024, government increased its capex spending on railways by 28% and on defence by 10%


As per the analysis, operating margin could moderate 80-100 basis points to 12-13% in fiscal 2025 as the market scenario continues to be highly competitive and exports remain sluggish, it said.

The report is based on analysis of 87 companies constituting around 70% of the capital goods sector.

“Private sectors’ continued capital outlays in conventional sectors (6-8% on-year rise) supported by ramp-up in commissioning of renewable capacities (25-30% on-year rise) augur well for prospects of capital goods companies,” said Aditya Jhawer, Director, CRISIL Ratings.

Investments in emerging sectors like electric vehicles and data centres is also expected to rise by 25% by fiscal 2028 as they expand their services.

Also, ability of companies to cater to technological needs of the emerging sectors would be critical to sustain the growth expectations, it said.