Samvat 2083: Capex, power, banks emerge as top sector bets; IT outlook selective

Infrastructure, power and banking are emerging as the key sectoral bets for Samvat 2083, with brokerage research pointing to India's domestic investment cycle, rising electricity demand and credit growth as potential drivers of corporate earnings. While analysts remain constructive on several manufacturing and industrial businesses, their outlook on information technology (IT) and consumption is more selective, with greater stress on earnings visibility, profitability and valuations.

The recommendations across research houses, including HDFC Securities, Kotak Securities, ICICI Direct, Nirmal Bang, Arihant Capital and Religare Broking, indicate a preference for businesses linked to domestic capital expenditure, capacity expansion and financial services.

Infrastructure and capital goods lead the investment theme

Infrastructure and industrial manufacturing feature prominently across the reports, spanning construction, cement, pipes and tubes, electrical equipment and defence manufacturing.

The investment thesis is supported by expectations of sustained government and private-sector spending, higher capacity utilisation and growing demand for industrial equipment. Larsen & Toubro, Ambuja Cements, UltraTech Cement, ABB India, CG Power and Bharat Electronics are among the companies identified by different research houses.

Nirmal Bang expects cement-industry demand to grow 10% year-on-year in FY27, driven by housing and infrastructure expenditure. The brokerage expects UltraTech Cement to deliver 12% volume growth in FY27, supported by demand and capacity expansion. The company plans to increase its grey cement capacity from around 210 million tonnes per annum (MTPA) to 240 MTPA by FY28.

Kotak Neo, meanwhile, sees opportunities in structural steel tubes, citing increasing investments in infrastructure, construction, energy and urban development. It noted that APL Apollo Tubes plans to expand its structural steel capacity from 5 million tonnes to 8 million tonnes by FY28.

Defence manufacturing is another part of this theme. Kotak Neo said Hindustan Aeronautics' order book stood at ₹2.55 lakh crore at the end of FY26, providing seven to eight years of revenue visibility, with a near-term prospect pipeline of ₹90,000 crore.

Power opportunity extends beyond renewables

Power and energy infrastructure form another recurring theme, with recommendations covering generation, fuel supply, transmission and electrical equipment.

HDFC Securities has identified Adani Power and Coal India, while Arihant Capital's selections include ABB India and CG Power. Religare Broking has also recommended Tata Power.

The opportunity is not limited to renewable generation. Rising electricity demand, the need for reliable power supply and renewable-energy integration are expected to support investments in transmission and distribution networks, transformers and high-voltage equipment.

Arihant Capital's investment thesis for ABB India specifically mentions data centres and high-voltage switchgear expenditure. Its CG Power recommendation points to the transmission and distribution opportunity and transformer capacity expansion.

Banks and financial services: Credit growth in focus

Banking and financial services remain well represented across the recommendations, covering private-sector lenders, public-sector banks, small finance banks and NBFCs.

Analysts are looking at loan growth, deposit mobilisation, improving asset quality and the possibility of margin recovery. Axis Bank, Kotak Mahindra Bank, HDFC Bank, Bank of Baroda, Bajaj Finance and Ujjivan Small Finance Bank feature in the research.

Jainam Broking's report on HDFC Bank highlights loan growth of 16.3% and deposit growth of 18.8% in Q2 FY27. It also points to the potential benefit of higher benchmark rates for the lender's floating-rate loan portfolio.

However, the outlook comes with risks, including pressure on net interest margins, competition for deposits and higher funding costs. The sectoral opportunity will therefore depend on banks sustaining credit growth while protecting profitability.

IT and consumption: Selective opportunities

The outlook on IT is more nuanced. Persistent Systems, Tech Mahindra, HCL Technologies and L&T Technology Services feature in the recommendations, with investment arguments centred on AI-led spending, deal wins, engineering research and development and company-specific margin improvements.

However, Kotak Neo's broader market commentary flags a shift in investor expectations around artificial intelligence. It said investors are moving away from speculative future growth towards "tangible, near-term monetization", with growing scrutiny of returns on AI-related capital expenditure.

Consumption, too, is not a broad-based call. Opportunities are concentrated in hospitality, premium discretionary businesses, automobiles and quick commerce. Indian Hotels features across multiple research houses, while Kotak Neo sees growth potential in Titan and Eternal.

On Indian Hotels, Jainam Broking highlighted Q2 FY27 revenue growth of 22%, occupancy of 82% and management's revised FY27 revenue growth guidance of 15-17%.

Pharmaceuticals, healthcare, chemicals, textiles and metals also feature in the recommendations, but their investment cases are more company-specific, ranging from specialty products and export opportunities to domestic demand and capacity expansion.

Overall, the sectoral outlook for Samvat 2083 suggests that brokerages are placing greater emphasis on India's domestic investment and earnings cycle. Infrastructure, power and financial services offer the broadest recurring themes, while opportunities in IT and consumption are increasingly tied to individual companies' ability to deliver measurable growth and profitability.