India Capex Momentum: Capex momentum intact but opportunities are increasingly selective

Research evidence excerpt

India Capex Momentum: Capex momentum intact but opportunities are increasingly selective

22 July 2026

India Capex Momentum EquitiesConstruction & Engineering

Capex momentum intact but opportunities are

increasingly selective India

◆ Central government and PSU capex were resilient while state Puneet Gulati*, CFA

government spending remained soft Senior Analyst, India Energy, Property & Infra HSBC Securities and Capital Markets (India) Private

Limited

◆ c80% of new project announcements were driven by data puneetgulati@hsbc.co.in

centres and nuclear in Maharashtra, indicating increasing +91 82 9189 7591

concentration in emerging capex themes SandeshAnalyst, IndiaShetty*Industrials

HSBC Securities and Capital Markets (India) Private

◆ Macro indicators suggest moderation in economic activity Limited

sandesh1.shetty@hsbc.co.in

+91 89 8338 6423

Government capex on track, even as pace moderates: Central government capex

Vishal Goel*, CFA

grew fiscal year to date (FTD) May’26 by 13% yoy driven by railway capex (+43% yoy) Analyst, India EMS and Consumer Durables

even as growth in other major segments was subdued – Roads (+1%) and Defence HSBC Securities and Capital Markets (India) Private Limited

(-14%) – on a high base. The government achieved 21% of its full year target (vs 20% in vishalgoel@hsbc.co.in

+91 0 80 6737 2115

previous year). PSUs growth moderated to 5% yoy in Jun’26, achieving 25% of its FY27

target (vs 22% in FTD Jun’26). FTD May’26 state capex was flat yoy.

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

Key government approvals in July’26: 1) The government cleared two proposals not registered/ qualified pursuant to FINRA regulations

worth INR1.9trn to deepen semiconductor (ISM 2.0, INR1.27trn) and mobile