JPMorgan Highlights Opportunities in Capital Goods Amid Capex Slowdown
About the Sector
India's capital goods sector is experiencing a moderate slowdown in capex growth, with an expected medium-term expansion of around 10-11%. Despite this deceleration, stock prices already reflect much of the slowdown, creating selective opportunities for investors in companies with strong growth visibility.
Investment Preferences: JPMorgan advises focusing on companies with consistent growth and visibility. Preferred picks include L&T, CG Power, Cummins, and Thermax for potential healthy earnings growth.
Trading Multiples: Valuations are now more attractive, providing a window for strategic investment in well-performing capital goods companies amid moderate capex expansion.
Brokerage Recommendations:
- Thermax - Initiate Overweight | TP: ₹3,869
- Cummins - Initiate Overweight | TP: ₹4,649
- CG Power - Initiate Overweight | TP: ₹840
- Praj Industries - Initiate Neutral | TP: ₹403
- ABB - Initiate Neutral | TP: ₹5,639
- Siemens - Initiate Underweight | TP: ₹2,795
- BHEL - Initiate Underweight | TP: ₹185
Investor Takeaway
Investors can consider selective exposure in well-performing capital goods companies as moderate capex growth presents opportunities for earnings expansion. Focus on visibility and strong fundamentals to navigate this cyclical environment.
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👉 Nifty Tip | BankNifty Tip
📌 Access detailed market insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
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.
