Winds of change? Motilal Oswal reinitiates coverage on Capital Goods sector; prefers L&T, ABB, Siemens, Cummins among 7 other stocks

Indian market is on a roll after the Bharatiya Janta Party’s (BJP) comfortable win in three states of Madhya Pradesh, Rajasthan, and Chhattisgarh.

Indian equity benchmarks soared to a new peak and the experts believe that there’s more in the offing. Markets, in fact, continued their record run in Wednesday’s trading session, led by technology, energy and consumer goods stocks. Headline index NSE Nifty closed at 20,937.70-level.

Amidst the ongoing bull run, Motilal Oswal has reinitiated coverage on the Capital Goods sector with a positive long-term bias.

The brokerage firm has maintained a selective stance on the sector and recommend ‘Buy’ on L&T, ABB, Siemens, Cummins, Kalpataru Power International, Kirloskar Oil Engine and Triveni Turbine. It has maintained ‘Neutral’ stance on BEL, Thermax and KEC and ‘Sell’ on Hitachi Energy.

According to Motilal Oswal, the capital goods sector has started benefitting from the government’s initiatives towards incremental capex spending, revival in select pockets of the private sector, improving growth outlook from international geographies and favorable raw material prices.

“Government has already set the ball rolling by undertaking long-term capex across key areas such as transmission, clean energy, railways, Make in India, PLI, defence indigenization, et al. until FY30, which provides a strong addressable market for capital goods companies,” it added.

It further added that the energy transition-related investments too are driving capex across domestic as well as international markets.

The brokerage firm noted that the uptick in capex will be driven by government spending across infrastructure segments such as transmission, railways, water, defence, private capex for core sectors, PLI-led schemes, data center and EV/EV charging-led infrastructure, increasing spend towards industrial automation and digitization, and sustainability-led capex.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

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