Capital goods stocks trade mixed as FM announces increase in capex to Rs 12.2 lakh crore

"Public capital expenditure has increased manifold—from Rs 2 lakh crore in 2014–15 to an allocation of Rs 11.2 lakh crore in the Revised Estimates for 2025–26.

Capital stocks traded mixed as it was announced that India’s capital expenditure allocation is set to cross Rs 12.2 lakh crore for the first time in FY27, according to the Union Budget presented by Finance Minister Nirmala Sitharaman on February 1.

"Public capital expenditure has increased manifold—from Rs 2 lakh crore in 2014–15 to an allocation of Rs 11.2 lakh crore in the Revised Estimates for 2025–26. In the coming financial year, 2026–27, I propose to increase it further to Rs 12.2 lakh crore. This step aims to strengthen the confidence of private developers by mitigating risk during the infrastructure development and construction phase," she said.  This is in line with industry expectations.

On the announcement, Nilesh Shah, MD, Kotak Mahindra AMC noted, "This budget has proposed a capital expenditure of Rs 12.10 lac crore which is more than the net market borrowing of Rs 11.70 lac crore." He added, "I pray that a path is laid where one day capital expenditure will be more than the total borrowing including small savings," he said.

Heavyweights such as ABB India and Siemens slipped 1.5% each, while Hitachi Energy India declined 0.8% and Siemens Energy fell 1.3%, indicating mild profit-taking at higher valuations. BHEL was largely flat (-0.08%). On the other hand, CG Power gained 3.7%, supported by a 19.4% YoY rise in profits, while GE Vernova T&D edged up 0.1% with profits more than doubling (+103.8% YoY). However, several mid- and small-cap stocks remained under pressure, with counters like KEC International (-2.2%), Inox Wind (-1.7%) and Thermax (-0.9%) trading lower

Sitharaman also announced a proposal to set up an Infrastructure Risk Guarantee Fund to provide prudentially calibrated partial credit guarantees to lenders.