Global brokerage Jefferies said the capital expenditure narrative has swung back sharply in FY27, marking a clear reversal from FY26, which was tilted more towards consumption.
According to Jefferies, spending priorities have shifted decisively towards capital expenditure in FY27, with road and rail capex rising in the range of 8–11% year-on-year compared with flat growth in FY26. Defence capital expenditure has emerged as a standout, recording an 18% YoY increase.
The brokerage also highlighted a sharp reduction in allocations for new initiatives under the Ministry of Finance. Jefferies noted that the allocation for these initiatives has been cut by 94%, reflecting rationalisation in budgetary priorities.
Overall capital expenditure is estimated to be up 12% YoY in FY27, Jefferies said. Excluding allocations related to the Ministry of Finance and BSNL, overall capex growth stands higher at around 13%.
On the sector front, Jefferies identified Siemens Energy, Hitachi Energy, Hindustan Aeronautics (HAL), Bharat Electronics (BEL), KEI Industries and Larsen & Toubro (L&T) as its top picks within the capital goods space.
Disclaimer: This article is based solely on the brokerage inputs provided. The views expressed are those of the brokerage and do not constitute investment advice or recommendations by the publication.
