Capital Goods Sector Growth Analyzed

Elara Capital predicts a strong quarter for the capital goods industry. They believe companies in this sector will see a 10% increase in sales compared to last year. This boost is driven by businesses wanting to buy new equipment and companies doing a good job of selling that equipment.

Key Points

• 10% overall revenue growth predicted for capital goods.
• ABB India: 9% growth, boosted by electrification.
• Siemens: 12% growth, showing strong performance.
• Thermax: 6% growth, slightly impacted by slower projects.
• Cummins: 6% growth, facing a larger previous sales volume.
• KEI Industries: 31% jump, due to high cable demand.

Company-Specific Forecasts

Here’s a breakdown of what Elara Capital expects from some key companies:

ABB India is forecast to grow by 9% due to success in making electrical equipment. Siemens is predicted to increase sales by 12%, which is a good sign.

Thermax is expected to grow by 6%, but their projects aren’t moving as quickly as planned. Cummins will see a 6% increase, but their sales were already high last year.

KEI Industries is predicted to jump by 31% because of a lot of demand for cables and wires, and the cost of copper is rising. BEML’s sales will likely increase by 6%, but some railway projects are taking longer.

RITES is expected to see a 5% rise in sales. KEC International is predicted to increase its sales by 14% because of strong project work.

Overall Market Trends

Elara Capital expects the entire capital goods sector to grow by 12% in this quarter. Consumer electricals and durable goods are expected to grow even more, at 22%.

Preferred Stocks

Elara Capital suggests investing in these companies:

• BEML
• Zen Technologies
• Amber Enterprises
• Kaynes Technology
• RITES
• Bharat Electronics
• Eureka Forbes
• KEI Industries

Order Inflow Changes

Companies in the capital goods sector received 20% fewer orders than last year. Defense orders were down 52%, mainly because of a large order from a single company.

Without that large order, overall orders were down just 6%.

Consumer Electricals & Electronics Growth

Consumer electricals, electronics, and durable goods are expected to grow 14% overall. This growth is mainly driven by electronics and companies that help make electronics.

Room air conditioner sales might improve a little, but there are still a lot of air conditioners sitting in stores, and new rules are coming that could affect sales.

Voltas is expected to see a 6% sales drop. Amber Enterprises is expected to grow by a small amount, 2%, because of a big increase in electronics sales.

Kaynes Technology’s sales could increase by 48% because of strong demand and a lot of orders. Dixon Technologies could see a 11% increase, due to more phones being sold and new factories.

Elara Capital also likes investing in Amber Enterprises, Kaynes Technology, Dixon Technologies, and Eureka Forbes in the consumer electronics market.

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