India Equity Strategy 2026: Capex revival likely to gain momentum; defence, capital goods, infrastructure set to benefit

India’s capital expenditure upcycle is showing early but credible signs of revival, with several investment-linked sectors likely to benefit over the next two to three years, according to Antique Stock Broking’s India Equity Strategy 2026. Improving macroeconomic conditions, policy support and rising private and household investment are laying the groundwork for a broader capex recovery.As per news agency PTI, the report identifies defence as one of the strongest structural beneficiaries of the capex push, driven by higher budgetary allocations, a strong order pipeline and continued emphasis on indigenisation under the Atmanirbhar Bharat programme. Export opportunities are also expanding, providing an additional growth lever. Capital goods companies are expected to see outsized earnings growth as fresh order inflows coincide with high operating leverage, with the report noting that even modest revenue growth could translate into sharp profit expansion.Industrial and electronics manufacturing services are also positioned to gain from domestic capex and global supply-chain diversification. As multinational firms pursue “China+1” strategies, India is emerging as a preferred manufacturing base, supporting demand for industrial equipment and electronics, according to PTI. The gradual return of private investment is expected to benefit infrastructure developers and engineering players, particularly those linked to roads, railways, power and urban infrastructure, while lower interest rates and improved affordability are reviving housing demand.Alongside the capex theme, foreign portfolio investors (FPIs) could stage a comeback in Indian equities in 2026 after record outflows last year. As per ANI, FPIs pulled out about $17.5 billion in 2025, the highest annual outflow on record. Antique said CY26 could see a revival as earnings visibility improves, valuations turn reasonable and macro stability strengthens.Corporate earnings are projected to re-accelerate, with Nifty earnings expected to grow around 16% CAGR over FY26–FY28, compared with about 7% over the previous two years. However, the report cautioned that global investor preference for AI-exposed markets remains a risk, potentially leading to sectoral divergence within Indian equities.