L&T, ABB, Siemens, others: Capital Goods firms see strong FPI boost, being key buyers in the sector

  • Stock Market Today: Siemens, GE T&D, Hitachi Energy share price have given Multibagger returns while L&T, ABB others have seen good gains. FPI interest remains strong on capital Goods sector, having made net equity investments of $723 million in May, despite being overall net sellers of equities.

Ujjval Jauhari
First Published24 Jun 2024, 02:22 PM IST
L&T, ABB, Siemens, GE T&D, Hitachi Energy others share prices : Capital Goods firm see strong FPI confidence
L&T, ABB, Siemens, GE T&D, Hitachi Energy others share prices : Capital Goods firm see strong FPI confidence

Stock Markets today: Larsen & Toubro, ABB, Siemens, share prices have gained around 50-103% during last one year with Siemens share price more than doubling. GE T&D India Ltd and Hitachi Energy share prices have been other Multibagger having gained 111-631% in a year.

Strong FPI buying in Capital Goods

The gains also have been supported by Foreign Portfolio Investor (FPI) buying. The FPI confidence has remained strong on Capital Goods stocks led by firm outlook , adding to the strong gains in Larsen & Toubro, ABB, Siemens, GE T&D, Hitachi Energy and others share prices . The FPI that were net seller of equities worth more than $ 3000 million in May, However have made net equity investments worth $723 million in the sector during the year, suggest NSDL Data compiled by Mint Research Bureau.

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Order flows and execution keep outlook firm

The strong order flows coupled with execution have been the key reasons that keeps outlook firm for capital goods companies.

The Government’s focus on capex in the past two years started an unabated rally in Capital Goods, said analysts. The execution remained strong and the same even led to an earnings beat in the Q4FY24. The margins growth led by softening of input prices has also been one of the key tail winds for earnings growth in the sector.

Analysts at Motilal Oswal Financial Services in their Q4 review review report said that Capital Goods sectors reported healthy earnings growth, providing further fillip to the overall Q4 Corporate earnings.

ABB, Siemens, Cummins, Honeywell, GE T&D, and Hitachi Energy are examples of industrial MNCs that have maintained trading over 70 times times due to strong domestic and export order inflows over the past two to three years, say anaysts.

Also Read- Multibagger Garden Reach Shipbuilders share price rises 9% on $54 million order inflow for commercial vessels

While analysts are watchful on execution, however they remain positive on sectors prospects. The policy continuity is being expected with the third term of Modi led government that has remained positive for investments.

Analysts at Nuvama Institutional Equities expect the momentum of order inflows for Power Transmission and Railroads to pick up speed in FY25, which will probably lead to a rerating of ABB, Siemens, CG Power and Industrial Solutions and Hitachi Energy's earnings. At 75% plus, RBI's capacity utilisation is at a multi-year high, signaling the beginning of the private capital expenditure cycle, they added.

Analysts picks from the sector

BHEL, Hitachi Energy, CG Power and Kalpataru Projects are the picks of Nuvama Institutional Equities. They also like companies as Data Patterns, APAR Industries, Schneider Electric and BEML though these companies are not in their active coverage.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

 

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First Published:24 Jun 2024, 02:22 PM IST
HomeMarketsStock MarketsL&T, ABB, Siemens, others: Capital Goods firms see strong FPI boost, being key buyers in the sector

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