Engineering Sector in India

Listen to our Podcast: Grow your wealth and keep it secure.

0:00 / 0:00

The importance of engineering can be understood from its influence across various sectors, be it infrastructure development, automation, aerospace, or consumer goods. As India’s ongoing journey towards becoming a manufacturing hub unfolds, the role of the engineering sector is evolving, positioning itself more strategically. It is not just about constructing infrastructures or developing machines anymore; it’s about creating a sustainable, technologically advanced future for the next generation. Given its importance, a deep understanding of its past trends, present-day operations, and future prospects is vital. This blog aims to explore the engineering sector in India, providing you with a comprehensive overview and enabling informed decisions, whether you’re an investor, policymaker, student, or enthusiast wanting to understand this industry.


During the era of British colonialism, the primary foundations of the engineering sector were laid with the establishment of basic ironworks and small-scale factories. Although this period had its limitations, it introduced India to organised engineering, setting the foundation for a robust infrastructure that would grow in the years to come.

After independence, India found itself at a crucial stage, with the need to establish a strong economy. The nation’s leadership identified the engineering sector as a key sector for future growth. Hence, there was a united effort to promote domestic engineering capabilities. Policies were put in place to encourage the creation and growth of numerous public sector undertakings (PSUs). These PSUs, beyond their direct contributions, played an important role in cultivating talent, equipping individuals with skills, and driving the growth of related industries.

As the 20th century progressed, the engineering sector in India saw significant transformation. From an initial focus on domestic requirements, it expanded onto the global stage. The economic reforms introduced in the early 1990s played a key role in this transition. The opening up of the Indian economy to foreign investments meant that the engineering sector benefitted from the inflows of not just capital but also cutting-edge technology, industry best practices, and global standards.

As we entered the 21st century, the diversification within the engineering sector became even more noticeable. Heavy engineering, dealing with large machinery and infrastructure projects, was complemented by light engineering, which focused on the production of precision instruments, tools, and smaller machinery. This distinction indicated the growing complexities and specialisations within the Indian economy, demanding custom engineering solutions for different sectors.

Another vital milestone in the journey of the engineering sector was the introduction of the ‘Make in India’ initiative in the later years. Designed to revive the manufacturing capabilities of the nation, it had a ripple effect on the engineering sector. This initiative not only promoted domestic production but also invited global players to set up their manufacturing bases in India. With the rise of both domestic and international players, research and development in the engineering field further increased, creating an environment of innovation and technological advancement.

Moreover, collaborations with international institutions and the establishment of dedicated technical institutes in India enhanced the knowledge base, providing the necessary skills and training to the younger generation. This has ensured that India continually refreshes its talent pool, ready to take on global challenges.

List of Top 10 Engineering Stocks

S.No.Company NameMarket Cap (in Cr)
1.Lakshmi Machine Works Ltd₹ 16,003
2.MTAR Technologies Ltd₹ 7,933
3.Sterling and Wilson Renewable Energy Ltd₹ 6,852
4.Tega Industries Ltd₹ 6,419
5.HMT Ltd₹ 4,587
6.ideaForge Technology Ltd₹ 4,132
7.Paras Defence and Space Technologies Ltd₹ 2,902
8.Skipper Ltd₹ 2,296
9.Anup Engineering Ltd₹ 2,110
10.Thejo Engineering Ltd₹ 1,757

Lakshmi Machine Works Ltd

Established in 1962, Lakshmi Machine Works Ltd is a leading name in the production of textile machinery. The company has a long-standing history and has been crucial in enhancing the textile sector’s efficiency. Beyond textile machinery, Lakshmi Machine Works has ventured into areas like CNC Machine Tools. With an impressive market capitalisation of ₹16,003 Crores, the company is a leader in the engineering sector. They have consistently shown strong performance, making them a reliable choice for investors.

MTAR Technologies Ltd

Focusing on precision engineering, MTAR Technologies Ltd has made a name for itself in sectors like nuclear, space and defence, and clean energy. The company’s commitment to delivering high-quality products has made it a preferred partner for several national and international clients. With a market capitalisation of ₹7,933 Crores, MTAR Technologies has shown a strong financial position and offers a promising outlook for potential investors.

Sterling and Wilson Renewable Energy Ltd

This company is a subsidiary of the Sterling and Wilson Group and has shown immense growth in the renewable energy sector. Sterling and Wilson Renewable Energy mainly focus on solar power solutions and have shown commitment towards green energy initiatives. With a market cap of ₹6,852 Crores, the company offers a solid investment option for those looking to contribute to sustainable growth.

Tega Industries Ltd

Tega Industries Ltd has established itself in mineral beneficiation, mining, and bulk solids handling sectors. The company has a global footprint and has received numerous awards for its innovative solutions. Its market capitalisation stands at ₹6,419 Crores, which showcases its strong financial position. The diverse range of products and services makes it an appealing option for investors.


HMT, or Hindustan Machine Tools, is a well-known name in India’s engineering sector. While many know it for its watches, HMT’s engineering division produces an array of machinery ranging from printing machinery to metal forming presses. With a market capitalisation of ₹4,587 Crores, the company has shown resilience and adaptability over the years.

ideaForge Technology Ltd

Specialising in drone technology, ideaForge Technology Ltd is among the top-notch players in this emerging field. They offer a wide range of Unmanned Aerial Vehicles (UAV) that are used in defence, homeland security, and industrial applications. Their market capitalisation is ₹4,132 Crores, and their focus on innovation makes them an attractive option for future-focused investors.

Paras Defence and Space Technologies Ltd

Operating in the area of defence and space technologies, this company offers a wide variety of solutions ranging from defence electronics to electromagnetics and optics. With a market cap of ₹2,902 Crores, Paras Defence shows strong potential for growth, backed by their technological know-how and R&D capabilities.

Skipper Ltd

Primarily engaged in the production of power transmission and telecom towers, Skipper Ltd has an influential role in India’s infrastructure development. Their market capitalisation is ₹2,296 Crores, and their commitment to quality and international standards makes them a reliable investment option.

Anup Engineering Ltd

A part of the Arvind Group, Anup Engineering Ltd has diversified its offerings to produce a range of engineered equipment. They cater to sectors like refineries, petrochemicals, and fertilisers, among others. With a market capitalisation of ₹2,110 Crores, the company offers robust financials and a solid track record, making it an appealing choice for investors.

Thejo Engineering Ltd

With its focus on bulk material handling and mineral processing, Thejo Engineering Ltd offers comprehensive solutions in these areas. Their market cap stands at ₹1,757 Crores, and they have received various awards for their contributions to the engineering sector. Their innovation-driven approach makes them a promising choice for those looking to invest in companies with future growth potential.

Current Performance

The engineering sector, in recent years, has been acting as the central pillar of the Indian economy, displaying strong results. Amidst changing global dynamics and domestic policy reforms, this sector has managed to maintain consistent growth. The trend can be further seen by observing key indicators like the inflow of foreign direct investments, order book sizes, and revenue growth of major engineering firms.

Moreover, there has been a noticeable rise in domestic demand for engineering goods and services, particularly in industries such as renewable energy, infrastructure, and transportation. Another big development has been the shift towards automation and digitalisation, with companies investing more in advanced technologies to optimise their operations. Governmental initiatives, like infrastructure development projects and urbanisation drives, have further enhanced the demand for engineering products and services. Besides, the sector’s strength can also be measured from its resilience, especially during economic challenges, where its diverse nature helps reduce the overall economic impact.

Future Outlook

Looking ahead, the future appears promising for the engineering sector. As India positions itself to be a global manufacturing powerhouse, the role of engineering, in making this vision a reality, becomes supreme. It’s expected that the demand for high-end machinery, strong infrastructure, and innovative technology solutions is likely to rise.

Moreover, specific areas within the engineering sector are showing significant promise. Renewable energy, for example, is expected to be a game-changer. As the world, including India, moves towards cleaner energy solutions, the engineering sector will play a crucial role in designing, developing, and deploying technology to utilise wind, solar, and other renewable sources.

Space research and defence technology are two more arenas where India is making significant efforts. With the government’s vision of self-reliance (‘Aatmanirbhar Bharat’) and the push for indigenous development in these areas, engineering firms that have expertise and capacity in these domains stand to gain immensely.

Also Read: Automobile Sector in India

Advantages of Investing in the Engineering Sector

  • Export Potential: Many Indian engineering companies have successfully expanded their footprints globally. They cater not just to domestic needs but to international markets as well. This export potential means a broader revenue base, and a chance for investors to utilise the growth of other economies, ensuring returns aren’t solely dependent on domestic performance.
  • Infrastructure Development: As India moves towards urbanisation and modernisation, the demand for infrastructure is increasing. The engineering sector is set for exponential growth. Investors can benefit from this steady demand trajectory.
  • High Entry Barriers: The engineering sector typically requires significant capital, expertise, and infrastructure. These high entry barriers can often limit undue competition, allowing established players to maintain their market positions and ensuring stable returns for investors.
  • Potential for High Returns: Given the critical role the engineering sector plays in India’s growth story, companies with innovative solutions and efficient management often experience significant growth. This can translate to higher returns for investors as compared to some other sectors.
  • Stable Dividend Payouts: Many established engineering companies, owing to their consistent revenue streams and profitability, often offer regular dividend payouts. For investors, this can mean a consistent income stream in addition to potential capital appreciation.
  • Beneficiary of Foreign Direct Investments (FDI): With global players looking to invest in India’s market, the engineering sector has been a prime beneficiary of FDI. Increased foreign investments can improve the sector’s growth and, by extension, enhance shareholder value.

Share this article: 

Frequently Asked Questions

1. Given the current market trends, which engineering company has the highest market cap, and what does this imply?

Answer Field

Lakshmi Machine Works Ltd holds the highest market capitalisation of ₹16,003 crores. This shows the company’s strong financial standing, market trust, and ability to generate consistent returns for its shareholders.

2. Why is the engineering sector significant for India’s economy?

Answer Field

The engineering sector is essential for India’s economic environment. It supports a range of industries by offering essential machinery, infrastructure, and advanced technology solutions. Its role in enhancing industrial growth and promoting innovation is crucial, making it fundamental to India’s developmental journey.

4. Before investing in engineering stocks, what factors should prospective investors evaluate?

Answer Field

Investment in engineering stocks should be a well-calculated decision. Potential investors must read the company’s financial statements, understand its technological capabilities, evaluate its position in the market, and forecast its growth potential based on sectoral trends. Additionally, the company’s management track record and corporate governance practices should also be taken into consideration.

5. Are engineering stocks subject to high market volatility?

Answer Field

While market volatility affects all sectors to some degree, the engineering sector’s performance largely reflects the broader economic scenario. When the economy flourishes, this sector typically thrives, but during economic slowdowns, it may face hurdles. However, given the sector’s fundamental importance, it often shows the ability to withstand challenges.

6. In light of geopolitical scenarios, how do engineering companies, especially those oriented towards defence, get impacted?

Answer Field

Geopolitical tensions and international disagreements can lead to shifts in defence budgets and policies. Engineering companies working on defence projects might witness increased demand during such times. However, geopolitical scenarios are complex, and companies need to plan while keeping the long-term perspective in mind.




No Result Found

Read More Blogs

Our Secure Trading Platforms

Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading

Bajaj Broking App Download

7 Lac+ Users


4.5+ App Rating


4 Languages


₹ 3800 Cr MTF Book