By Abdullah ShahCapex, or capital expenditure, is typically a positive signal, indicating that the company is upbeat about its future and planning its next leg of growth.
So capex growth forecasts by analysts are a useful proxy for industry optimism and future growth, and help justify current valuations.
After several muted quarters in capex spending, a report by the Union Bank of India says that FY26 looks promising, with both fiscal consolidation and higher capex outlays. Capex in April-May FY26 rose 54% YoY to Rs 2.2 lakh crore (19.7% of the Rs 11.2 lakh crore annual target), indicating frontloaded government spending to boost demand.
Group CEO of Infomerics Valuation and Ratings, Shubham Jain, said, “India's economy is expected to grow at a rate of 6.3-6.8% in the next 12 to 18 months. This growth will be driven by strong domestic consumption and government-led infrastructure spending.”
In this edition of Chart of the Week, we look at the most dominant sectors, software & services, general industrials, utilities, and metals & mining, that turn up in a screener of stocks with high Forecaster capex growth estimates.
Software & services sector ramps up AI, cloud investments
15 of the top 100 stocks with the highest capex forecasts are in the software & services sector. Research firm, Gartner estimates the industry to grow 11.1% to $161.5 billion in 2025.
The sector has received strong deals in the cloud computing and artificial intelligence segments over the past two years. In 2024, Indian companies spent over $8.5 billion on public cloud services, with forecasts estimating it to reach $13 billion by 2026.
As of 2024, 65% of Indian IT services firms have integrated AI robotic process automation (RPA) into client offerings, with high demand from banking, financial services, and insurance (BFSI), manufacturing, and retail clients. This has prompted the software & services companies to ramp up the development of AI and cloud services, leading to higher capex spends.
IT consulting & software firms such as MphasiS, Tata Elxsi, Zensar Technologies, and HCL Technologies are among the major contributors to this trend.
Trendlyne’s Forecaster estimates MphasiS’ capex to surge 556.2% in FY26. The company’s deal pipeline consists of 65% deals in the AI segment in Q4FY25, up from 25% in Q4FY24. The management plans to invest in AI to enhance client experience while keeping the cost to serve low. This involves integrating AI directly into business operations, and continuing these investments regardless of the macro environment.
Nitin Rakesh, Chief Executive Officer of MphasiS, said, “We will be focused on growing the deal pipeline and total contract value (TCV), with AI-led deals playing a bigger role. We plan to invest in our AI solutions while staying within our target margin band.”
Internet software company Just Dial has the highest capex growth estimate of 826.1% in the sector, while Tata Elxsi and Zensar Technologies are expected to see a capex growth of 356.9% and 296.6%, respectively.
Software products developer Tata Technologies is estimated to increase its capex by 288.2%, while HCL Tech is expected to grow its capex by 199.8% in FY26. Both companies are also investing in AI and cloud computing services.
PLI push and rising utilisation drive industrial capex upswing
General industrials is seeing a sharp rise in capital investment. Backed by government initiatives like "Make in India" and PLI schemes, companies are actively setting up and expanding production facilities. A key trend driving this is improving capacity utilisation — existing plants are running closer to their full potential, which justifies further expansion.
The Economic Survey 2024-25 noted, "Manufacturing is resilient, with capacity utilisation above long-term averages, and private sector investment continues to grow steadily." Reflecting this momentum, 13 out of the top 100 stocks in our screener are from the general industrials sector.
HEG leads in capex growth estimates with a 418.2% rise expected in FY26, driven by its Rs 1,850 crore graphite anode plant. This electrodes manufacturer expects to maintain or slightly improve utilisation this year. Chairman and CEO Ravi Jhunjhunwala said, “We aim to keep utilisation at 80-85%, compared to an average of 50-60% of our international peers.”
Electrical equipment firm Hitachi Energy, preparing for India’s major grid expansion (from 400 GW to 900 GW), is putting a large part of its recent QIP funds toward factory upgrades, machinery, and infrastructure. Its FY26 capex is five times what it spent between FY20 and FY25.
Explosives company Solar Industries’ order book has jumped from Rs 2,600 crore in FY24 to Rs 13,000 crore in FY25. ICICI Securities expects the company to invest Rs 15,000 crore over the next five years as it scales up in defence orders. CEO Manish Nuwal noted, “Solar has signed a Rs 12,700 crore MoU with the Government of Maharashtra to invest in defence and aerospace,” adding that defence revenue will rise to "over 30% from the current 18%" driven by this capex.
Forecaster projects defence products maker Zen Technologies capex to grow by over 300% in FY26 to Rs 125 crore. However, the company missed the Forecaster estimates sharply for FY25 capex. CEO Ashok Atluri stated, “We’ve allocated Rs 70 crore for the R&D facility and another Rs 5 crore for equipment. We make budgets, but we spend when opportunities come up or when we see a gap in our products.”
Utilities sector capex surges on Government schemes
The utilities sector also features in the screener, with eight among the top 100 companies. The government has introduced several schemes to modernise the power distribution infrastructure and increase the share of renewable energy. Prime Minister Narendra Modi announced the ‘Panchamrit’ goals at the 26th UN Climate Change Conference (COP26) in Glasgow.
Under Panchamrit goals, the government aims to achieve a renewable energy capacity of 500 gigawatt (GW) by 2030, with 50% of the energy requirement being met by renewable energy.
Power infrastructure players like JSW Energy, Adani Power, and Techno Electric & Engineering are capitalising on the government’s push to modernise the energy sector. Techno Electric has the highest Forecaster capex growth estimates of 790.7% among utilities stocks in FY26. The company’s Director & CEO, Ankit Saraiya, in an interview with CNBC, announced a $1 billion (~ Rs 8,598 crore) investment plan to set up a total data centre capacity of 250 megawatt (MW) across India by 2030.
The company plans a capex of Rs 5,000 crore in FY25-26, with half of the capex assigned for smart meters and the remaining shared between expansion of data centres and tariff based competitive bidding (TBCB) power transmission projects.
Green energy firm ACME Solar Holdings is riding the government capex waves in the renewables sector, with Forecaster estimates capex growth of 308.8% in FY26. The company plans to invest Rs 17,000 crore to expand its renewable energy capacity to 5 GW in FY26. It aims to add new capacities in the hybrid and firm & dispatchable renewable energy (FDRE) segments.
ACME Solar’s CEO, Nikhil Dhingra, said, “Our growth plan is not only focused on expanding solar capacity but also diversifying the project mix. Our under-construction projects include a mix of solar, wind, FDRE, and hybrid solutions. These projects have a short capex to revenue cycle, ensuring faster accretion of revenue and margin benefits.”
Forecaster projects JSW Energy’s capex to grow 227.8% in FY26. The company plans an investment of Rs 15,000-18,000 crore during the financial year to increase its renewable energy and energy storage capacity.
Adani Power also shows up in the screener with Forecaster estimating a 192.1% increase in capex during FY26. This Adani Group company plans a capex of Rs 13,000 crore to increase its thermal power generation capacity to 30.7 GW by FY30.
Metals & mining firms ramp up expansion, eye backward integration
Six out of the top 100 stocks belong to the metals & mining sector, which is currently witnessing strong capex activity as companies expand existing production and set up new integrated facilities.
A key trend across the sector is the shift toward value-added products to boost profit margins. At the same time, companies are looking to cut operational costs through backward integration and better logistics, such as building slurry pipelines to reduce transportation expenses.
The plan to commission the cold-drawn pipe is driving Maharashtra Seamless’ capex growth estimate of over 1000%. The company, which manufactures steel products, is focusing its Rs 850 crore capex on this project, with machinery already ordered and expected to arrive later this year. Cold-drawn pipes are high-precision pipes used in sectors like oil & gas and automotive. The company expects this expansion to boost its annual turnover by Rs 1,900 crore.
Mining firm Lloyds Metals & Energy plans to invest around Rs 6,000-6,500 crore in FY26 and over Rs 7,000 crore in FY27. Managing Director Rajesh Gupta said, "The ongoing capex is heavily geared towards backward integration," referring to key projects such as a pipeline to move raw materials more efficiently, a facility to make sponge iron, and its own power plant—all of which are close to completion.
Non-ferrous metals processor Gravita has planned a Rs 1,500 crore capex through FY28, including Rs 1,000 crore for expanding current operations and Rs 500 crore for entering new areas such as lithium-ion battery recycling, paper, rubber, and steel.