How Are KPI And KEC Positioned In MOFSL’s Capital Goods Sector Strategy?

Why Is MOFSL Turning Selective On Capital Goods Stocks Like KPI And KEC?

Motilal Oswal Financial Services (MOFSL) has shared its latest views on the capital goods sector, with a focus on KEC International and Kalpataru Projects International (KPI). The report suggests that the transmission pipeline is strengthening, margins are set to improve, and differentiated ratings reflect company-specific positioning.

What Is Driving The Order Pipeline?

The Central Electricity Authority’s (CEA) ordering pipeline has picked up pace after a muted start in FY26. Both KEC and KPI confirm robust visibility over the next few years, with greater emphasis on HVDC projects, international markets, and non-T&D opportunities.

Transmission & Distribution (T&D) remains the backbone of growth for these companies. A steady flow of government-led power transmission initiatives is expected to sustain momentum for the sector.

How Are Margins Likely To Trend?

Stable commodity prices are paving the way for gradual margin recovery from FY26 onward. With execution improving and raw material volatility easing, both companies are positioned for stronger profitability.

While T&D continues to dominate, diversification into international projects and non-T&D verticals could further support margin resilience and earnings visibility.

What Are MOFSL’s Ratings And Targets?

Kalpataru Projects International (KPI) has been rated BUY with a target price of ₹1,450, reflecting strong execution visibility. KEC International, however, has been rated NEUTRAL with a target price of ₹950 due to a relatively more balanced outlook.

The differentiated stance underscores KPI’s stronger growth profile compared to KEC, even though both are well-placed in the sector’s upcycle.

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Investor Takeaway

The capital goods sector is entering a healthier phase with improved ordering momentum, stable input costs, and expanding opportunities in HVDC and international markets. MOFSL’s selective stance favors KPI as a stronger play, while KEC remains steady but less aggressive. Investors may consider capital goods exposure as a medium-term structural story.

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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.

Written by Indian-Share-Tips.com, which is a SEBI Registered Advisory Services

tags: MOFSL on Capital Goods, Kalpataru Projects International, KEC International, Power Transmission Orders, HVDC Projects, Capital Goods Margins