Hold L&T, Hitachi, Cummins India: Rajesh Kothari

Rajesh Kothari, MD, AlfAccurate Advisors told CNBC-TV18, “Capital goods has to come back because the investments will be more. In fact if you look at the Budget, the government is focusing on investment led growth and not the consumption led growth.”

He further added, “So, consumption on its own can lead to growth but government perspective is focused on investment. If there is more investment then that is going to lead to improvement on the stalled projects. So, as there is more investment then definitely the capital goods indices need to do better compared to the overall market cap,” he added.

“As an overall sector, we are invested quite heavily on the capital goods sector. Capital goods will be one of the heavy sector equivalents to auto and auto ancillaries etc,” Kothari said.

He further said, “We believe that Hitachi is on a right growth path and it is a secular story because air conditioning is becoming a necessity. So from luxury to necessity and with a market cap of less than a billion dollar, it is still probably Rs 3,500 crore kind of a market cap. Hence, we believe there is a still significant opportunity if one wants to hold for next three, four, five years. The valuation will always look expensive if you look at 12 months forward but if you look at the secular growth which the industry offers and the competitive positioning which Hitachi brings in then surely it is worth holding.”