MNC capital goods stocks gain traction on govt's planned infra and capex push
capital goods stocks, which have been relatively inactive in recent months, are now garnering interest from investors. Analysts foresee a potential uptick in the performance of these stocks in the coming weeks, citing a positive outlook for the sector.
This optimism is driven by government initiatives that support incremental capital expenditure, a revival in specific segments of the private sector, and a more favourable growth outlook in international markets.
The Siemens stock, which saw a modest 5.5% increase over the last six months, surged 10% in December.
Similarly, ABB, with a 12% gain in the previous six months, has experienced a notable uptick of more than 9% in December. Additionally, Hitachi Energy and Ingersoll-Rand have both recorded gains of over 8% since the beginning of the month.
Analysts see positive traction in the capital goods segment as the government endeavours to push capex activity that's expected to drive the next leg of growth in an economy where capacities are beginning to be stretched.
Global companies having strong cash flows and high levels of capacity utilization would take advantage of the Centre's initiatives as well as incentives, said analysts.
«Most MNCs catering to infrastructure, whether they are in power transmission, distribution, green energy or railways sector, can leverage their strong parentage, technical know-how and global presence,» said Kaushik Dani, fund manager — PMS, Abans Investment Managers.
