Best Industrial Products Stocks to Invest in Jan, 2026

What are Industrial Products Stocks?

Industrial products stocks include firms that manufacture essential goods for sectors like automotive, chemicals, and energy. These stocks are vital for economic growth, benefiting from rising industrial demand, government manufacturing policies, and technological shifts.

Between 2021 and 2023, the sector surged due to robust domestic production and initiatives like the ₹1.97 lakh crore PLI scheme. Companies such as ABB India and Bharat Forge gained significantly, driven by automation and precision engineering demand. The industrial production index rose 5.7% in FY23.

Why You Should Invest in Industrial Products Stocks?

You should invest in Industrial Products Stocks for four main reasons. The reasons are Manufacturing Growth, Government Support, Export Opportunities, and Technological Advancements.

• Manufacturing Growth: India’s industrial sector is expanding rapidly, driving demand for industrial products like machinery, equipment, and tools. The Indian industrial products market was valued at ₹6.2 lakh crore in 2023 and is expected to grow at a CAGR of 9-10% over the next five years. Major players are benefiting from rising industrial activity and increasing automation in factories.
• Government Support: Policies like the Production-Linked Incentive (PLI) scheme and Make in India are fueling domestic manufacturing. The government allocated ₹1.97 lakh crore for the PLI scheme across multiple industrial sectors, boosting companies like Hindustan Aeronautics Ltd. (HAL) and Thermax. These policies encourage self-reliance and reduce dependence on imports.
• Export Opportunities: India is emerging as a key player in global industrial product exports, with outbound shipments growing at 14% YoY in FY2023, reaching ₹3.5 lakh crore. The global shift towards diversified supply chains is benefiting companies like ABB India and Honeywell Automation, which are seeing rising demand for their industrial solutions.
• Technological Advancements: The adoption of smart manufacturing, IoT-enabled machinery, and energy-efficient industrial products is accelerating. Companies like Siemens India and Schaeffler India are investing in advanced manufacturing capabilities, positioning themselves for future growth as industries move towards automation and sustainability.

With a booming manufacturing sector, strong government support, rising exports, and cutting-edge technology, industrial products stocks present a solid investment opportunity. Investors looking for long-term value should consider leading industrial companies shaping India’s growth trajectory.

What is the Future of Industrial Products Stocks?

The Future of Indian Industrial Products Stocks looks promising, driven by strong manufacturing growth, rising infrastructure demand, and supportive government policies. The Industrial Products stocks are an advantage as the Union Budget of 2025 allocated ₹1.8 lakh crore for the development of industrial parks and manufacturing hubs, boosting demand for industrial products like machinery, electrical equipment, and automation solutions.

The Production-Linked Incentive (PLI) scheme for industrial manufacturing saw a 40% increase in funding, promoting domestic production and reducing reliance on imports. 

Market trends indicate sustained investor confidence in the sector. Following key government announcements, Siemens India’s stock rose by ₹150 (5.2%), reflecting optimism about future growth. The Indian industrial products sector, valued at ₹9.6 trillion in 2023, is projected to grow at a CAGR of 9-10%, reaching ₹17 trillion by 2030.

With increasing investments in automation, energy efficiency, and advanced manufacturing, industrial products stocks present a strong long-term investment opportunity, making the sector a crucial pillar of India’s economic growth.

What Factors Affect Industrial Products Stock Prices?

Industrial products stock prices are affected by 4 main factors. The factors are Raw Material Costs, Industrial Demand, Government Regulations, and Global Economic Trends.

• Raw Material Costs: The cost of essential raw materials like steel, copper, and polymers directly impacts industrial product manufacturers. In 2021, rising copper prices led to a 12% stock decline for Polycab India due to increased costs in cable and wire production. Companies that manage procurement efficiently or adopt cost-effective technologies tend to maintain better margins.
• Industrial Demand: The performance of industrial product stocks is tied to demand from sectors like manufacturing, construction, and power. In FY23, Havells India saw a 20% stock price rise as increased demand for electrical goods and automation solutions boosted revenue. 
• Government Regulations: Policy changes, such as import duties and environmental norms, influence industrial product companies. In 2023, government incentives for local manufacturing under the “Aatmanirbhar Bharat” initiative helped SKF India’s stock gain 18% as demand for domestically produced bearings surged.
• Global Economic Trends: The industrial products sector is highly interconnected with global markets. A global slowdown in 2020 caused a 10% drop in Siemens India’s stock as industrial automation orders declined. As the economy rebounded in 2022, exports of industrial components surged, driving a 25% rise in stock prices of companies like Schaeffler India.

With India’s ongoing focus on industrial automation, infrastructure development, and domestic manufacturing, industrial products stocks remain a promising long-term investment. Companies like Honeywell Automation and ABB India have delivered over 30% returns in the past year, benefiting from rising demand and supportive policy measures.

What are the Advantages of Investing in Industrial Products Stocks?

Investing in Industrial Products stocks is advantageous for 3 main reasons. The reasons are Rising Manufacturing Demand, Government Support, and Technological Advancements.

• Rising Manufacturing Demand: The industrial products sector is critical to manufacturing, logistics, and automation, ensuring consistent demand for industrial machinery and equipment. As India’s manufacturing sector expands, companies supplying industrial products benefit from sustained growth. SKF India, a leading bearings manufacturer, saw a 15% revenue growth in FY23, driven by increased demand from the automotive and industrial sectors.
• Government Support: Policies like ‘Make in India’ and the Production-Linked Incentive (PLI) scheme promote local manufacturing, reducing dependence on imports and driving domestic industrial production. The Indian government allocated ₹1.97 lakh crore for the PLI scheme, boosting industrial equipment demand. Companies like Timken India, a leader in motion control products, reported a 28% YoY revenue growth in Q3 FY24, benefiting from increased infrastructure and industrial activity.
• Technological Advancements: The Adoption of automation, AI-driven manufacturing, and energy-efficient solutions is revolutionising the industrial sector. Companies investing in Industry 4.0 technologies gain a competitive edge through increased efficiency and innovation. Honeywell Automation India, leveraging smart factory solutions, recorded a 20% increase in net profit in FY23, reflecting strong demand for industrial automation.

With India’s industrial products market projected to grow at a CAGR of 8-10% over the next five years, investing in this sector offers promising long-term potential. Companies like Schneider Electric India and Cummins India are well-positioned to capitalise on the country’s rapid industrialisation and infrastructure expansion.

What are the Risks of Investing in Industrial Products Stocks?

Investing in Industrial Products Stocks is Risky for 3 Main Reasons. The reasons are Economic Cycles, Price Fluctuations, and Policy Changes.

• Economic Cycles: The industrial products sector is highly dependent on economic activity, with demand fluctuating based on industrial expansion, infrastructure projects, and manufacturing output. During economic downturns, industrial production slows, reducing demand for machinery, equipment, and other industrial goods. For example, in FY20, India’s Index of Industrial Production (IIP) contracted by 0.8%, leading to lower order inflows for companies like Cummins India, which saw a 12% decline in stock price due to reduced demand for its industrial engines.
• Price Fluctuations: The sector relies on raw materials like steel, aluminium, and energy, making it vulnerable to price volatility. If costs rise sharply and companies cannot pass them on to customers, profit margins shrink. In FY22, a 40% increase in steel prices significantly impacted manufacturing costs for companies like ABB India, causing a temporary dip in their profit margins and stock price correction. Persistent fluctuations in input costs add uncertainty to earnings.
• Policy Changes: Government policies on industrial development, taxation, and environmental regulations directly affect the sector. Favourable policies, like the PLI scheme for manufacturing, boost demand, while sudden regulatory shifts can disrupt business operations. In FY23, the government’s focus on Make in India and localisation of production benefited firms like Bharat Forge, which gained from increased domestic manufacturing incentives. However, sudden import restrictions or changes in taxation can create challenges for industry players.

Despite these risks, India’s industrial sector remains a strong long-term bet, driven by increasing private investments and government-led infrastructure development. The ₹111 lakh crore National Infrastructure Pipeline (NIP) and rapid growth in domestic manufacturing are expected to propel companies like Siemens India, which has seen a 75% stock surge over the past three years.

When Industrial Products Stock Prices Go Up?

Industrial Products stock prices go up mainly due to 3 reasons. The reasons are Manufacturing Growth, Export Opportunities, and Government Policies.

• Manufacturing Growth: The rising demand for industrial products is fueled by India’s expanding manufacturing sector. The government’s “Make in India” initiative and an expected ₹18.3 lakh crore manufacturing output by 2025 have driven strong growth. Cummins India saw a 20% stock rise in 2023 as demand for industrial engines and power solutions increased with the growth of domestic manufacturing.
• Export Opportunities: India’s industrial products sector benefits from increasing global demand, especially as supply chains shift towards India. Engineering goods exports grew by 10% in FY23, reaching ₹9.6 lakh crore. Companies like AIA Engineering, a leading manufacturer of industrial grinding media, saw a 25% stock surge in 2023 due to strong export demand from the mining and cement industries.
• Government Policies: Supportive policies such as the PLI scheme and increased spending on industrial infrastructure have boosted the sector. The Indian government allocated ₹3 lakh crore for manufacturing incentives under various schemes. Honeywell Automation India saw a 15% rise in its stock price in 2024, benefiting from government-led automation and smart factory initiatives.

With strong domestic manufacturing growth, rising exports, and government-backed incentives, India’s industrial products sector presents a strong long-term investment opportunity. For instance, Schaeffler India reported a 30% profit increase in FY24, reinforcing the sector’s growth momentum and investment appeal.

When Industrial Products Stock Prices Go Down?

Industrial Products Stock Prices Decline Mainly Due to 3 Reasons. The reasons are Raw Material Costs, Government Regulations and Global Demand Fluctuations.

• Raw Material Costs: Industrial product manufacturers heavily depend on raw materials like steel, aluminium, and polymers. Any surge in these commodity prices increases production costs, squeezing profit margins and negatively impacting stock valuations. In 2022, rising steel and energy costs led to a 12% drop in the stock price of AIA Engineering, a key supplier of industrial components. 
• Government Regulations: Strict regulatory policies, including environmental compliance, taxation, and import-export restrictions, can affect industrial product companies. In 2023, India’s push for stricter pollution control measures led to increased compliance costs for companies like ABB India, causing short-term stock price fluctuations.
• Global Demand Fluctuations: Since many Indian industrial product companies export machinery and equipment, their stock performance is tied to global demand. A decline in manufacturing activity in key markets like the U.S. and Europe can reduce export orders, leading to stock price corrections. In 2022, economic uncertainty in China and Europe contributed to a 10% decline in the stock price of Cummins India, as demand for industrial engines weakened.

Despite these risks, India’s industrial sector remains poised for long-term growth, driven by increased domestic manufacturing and infrastructure development. The government’s Production-Linked Incentive (PLI) scheme has accelerated investments, helping stocks like Schaeffler India surge by over 85% between 2020 and 2023. Investors seeking exposure to India’s industrial expansion can find strong opportunities in this sector.