Capital goods stocks may fall a bit

CNBC-TV18’s Executive Editor, Udayan Mukherjee – Capital Goods space has got hurt quite a bit. Most of the good quality capital goods companies like BHEL, Siemens, ABB are now trading in that 20-23 P/E multiple, which is a big come down from where they were trading at just a few months back. So this sector is under performed, valuations have corrected significantly. They bounced a little bit yesterday because they probably got oversold like most of the infrastructure sector.

But my feeling is that if the market does not get out of the woods very soon, then one may find some of these good quality capital goods companies in 18-20 P/E multiple. But if you do that may be it makes a lot of sense to go out and look at them aggressively because their valuation froth, may be not entirely but to a large extent, has got skimmed down. And now it’s a question of timing your entry, whether you want to buy 10% lower or start accumulating now because they have got corrected quite a bit.

So my sense is that they could fall a bit more may be but you probably are close to the last 10-15% of the fall in many of these good quality capital goods companies.