The current bull run has instilled strength across the board and on infra push has also led capital goods sector to even see massive gains. On the previous day itself, BSE Capital goods index hit a new high in line with the headline indices which also logged new highs in trade on September 17, 2021.
What are capital goods and the sector's prospects in India?
Capital goods are typically goods that employ a lot of capital and are used for work areas such as construction etc.
Now coming to the prospects of the Engineering and Capital goods industry as per the IBEF report, investment expenditure and investment will drive the demand for consumer goods. Various government initiatives also continue to support the industry with its various schemes and initiatives:
1. Extending Rs. 10 million credit to MSMEs in just 59 minutes via the online portal
2. 100% FDI
3. De-licensing the engineering sector.
Furthermore the sector on an autonomous basis:
Includes some of the large players employing massive workforce i.e. skilled
The sector enjoys sector advantage on various measures such as market knowledge, manufacturing cost, technology and innovation i.e. also propelling higher investment into the sector.
Top 4 Capital Goods Sector companies that even yielded up to multibagger returns
|Capital goods stock||Last trading price||% Gain||Mkt capitalization|
|Bharat Electronics||Rs. 205.3||98%||Rs. 50023 crore|
|Havells India||Rs. 1471.9||116%||Rs. 92185 crore|
|Larsen and Toubro||Rs. 1716.2||89%||Rs. 241067 crore|
|Siemens||Rs. 2180.55||73%||Rs. 77653 crore|
1. Bharat Electronics:
Bharat Electronics Limited (BEL) is a Navratna PSU under the Ministry of Defence, Government of India. It manufactures advanced electronic products and systems for the Army, Navy and the Air Force. BEL has also diversified into various areas like homeland security solutions, smart cities, e-governance solutions, space electronics including satellite integration, energy storage products including e-vehicle charging stations, solar, network & cyber security, railways & metro solutions, airport solutions, Electronic Voting Machines, telecom products, passive night vision devices, medical electronics, composites and software solutions.
Coming to its scrip, the scrip in a year's time have gained 98% close to bagging multibagger returns.
M-Cap of the firm- Rs.50,023 crore
Sector P/E- 24.79
2. Havells India:
The company is a Fast Moving Electrical Goods (FMEG) Company with an extremely strong global presence. The company enjoys dominance is in products including Industrial & Domestic Circuit Protection Devices, Cables & Wires, Motors, Fans, Modular Switches, Home Appliances, Air Conditioners, Electric Water Heaters, Power Capacitors, Luminaires for Domestic, Commercial and Industrial Applications.
The company in over a year despite the pandemic led disruption and market sentiment turning haywire amid financial crisis saw good returns for its investors, almost doubling investors' wealth.
Sector P/E- 77.70
3. Larsen and Toubro:
With 8 decades of existence, the company is globally the largest companies in India's private sector. The company's capabilities range across Technology, Engineering, Construction, and Manufacturing, and maintains a leadership in all its major lines of business.
P/E TTM- 19.36
Sector P/E- 21.32
With a focus on electrification, automation and digitalization, Siemens India stands for engineering excellence, innovation, and reliability. As one of the world's biggest producers of energy-efficient, resource-saving technologies, Siemens is a pioneer in infrastructure and energy solutions, automation and software for industry and is a leader in medical diagnosis. Siemens also provides business-to-business financial solutions, rail automation and wind power solutions.
The company's scrip in a 1-year time has gained by 73%.P/e TTM- 70.66
Sector P/E- 95.54
With the infra boom and investment planned to take Indian economy to new heights and be more user friendly, these stocks will contribute more to the economy and will continue to also record gains. Nevertheless the information is collated just for informational use.