By Varinder Bansal, CNBC-TV18

Capital goods have been under pressure of late. What do the valuations of some non-index large capital stocks suggest right now?

The downtrend started with L&T and then percolated down to BHEL. After that, stocks like Punj Lloyd, Voltas, Alstom, Crompton Greaves – all took a hit.

At their peak levels, most of the stocks – the non-Index capital goods stocks were trading at anywhere between 30-40 times FY09 and around 23-30 times FY10.

Now, all the non-Index capital goods stocks are trading at anywhere between 17-20 times their FY09 multiples and around 12-15 times FY10 multiples.

So this might be a good time to do some cherry-picking. But at this point of time, comparing all the companies, one would find that L&T is still the most expensive. BHEL is inexpensive compared to that.  

Capital Goods Stocks

PE                                       FY09e              FY10e (estimated earnings)

Punj Lloyd                            36.44x             26.24  

Voltas                                  32.29x             25.05  

Alstom                                 39.97x             29.98  

Crompton Greaves                 32.29x            23.79  

Capital Goods Stocks

                                    FY09e P/E       FY10e P/E      

L&T                              45.98x             34.74x

BHEL                           35.73x             28.73x              

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