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Last Updated : Jan 16, 2018 04:35 PM IST | Source: Moneycontrol.com

Capital Goods sector 3QFY18E preview - Margin improvement; rise in order flows QoQ: HDFC Securities

HDFC Securities has come out with its sector report on Capital Goods dated January 10, 2018. Expect better post results commentary.

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HDFC Securities' sector report on Capital Goods

 

Our coverage universe is likely to witness ~6% YoY growth in revenues. While Engineers India (EIL), Skipper and Swaraj Engines may clock healthy revenue growth, Cummins (KKC)/Thermax (TMX) are likely to witness lower growth at ~5/6% due to sluggish exports/lower book to bill. While Skipper’s revenue growth may be aided by the likely come back of the polymers segment, EIL’s growth is on the back of a strong order book. Swaraj’s growth may be driven by a 13% YoY volumes growth.


Rolling forward the valuation methodology from Sept-19E to Dec-19E, the TPs for Skipper/KKC/EIL/TMX have increased to Rs 271 (vs 261)/ Rs 1,016 (vs Rs 1,007)/Rs 216 (vs Rs 183)/Rs 1,014 (vs Rs 985). Also, the TP for Swaraj has increased to Rs 2,566 (vs Rs 2,489).


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First Published on Jan 10, 2018 03:37 pm
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