Capital goods policy good, but targets aggressive: Credit Suisse

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26 Aug, 2025 12:21

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Moneycontrol BureauBroking firm Credit Suisse has welcomed the capital goods policy approved by the Cabinet last week, buy feels the targets may be aggressive.The policy aims to increase local production and exports threefold and fivefold respectively by 2025.According to Credit Suisse the share of imports of capital goods is over 50 percent."Heavy electrical (55%) and earthmoving equipment (10 percent) dominate total demand. Both have ecosystem in India and can do better with policy support," Credit Suisse says.The broking firm highlights the fact that the national Manufacturing Policy of 2011 has not helped arrest the decline in the manufacturing sector’s share."There is a gradual progress in promoting industry via imposition of import duty, correction of inverted duty structures and "Make" policy in defence segment. Progress, however, remains slow," says the Credit Suisse note."Even central PSUs (e.g., NTPC and PGCIL) are lacking in providing support to domestic manufacturing. Defence ordering is yet to pick up," the note says.Credit Suisse expects companies like ABB, Siemens, Cummins, and Thermax to benefit from the capital goods policy. It has an 'outperform' rating on Larsen & Toubro and Voltas.