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Earnings visibility is improving, so is execution
At the close, the Sensex was down 188.50 points or 0.25 percent at 74,482.78, and the Nifty was down 38.60 points or 0.17 percent at 22,604.80. About 2013 shares advanced, 1652 shares declined, and 142 shares unchanged.
Nomura has retained its target price for KEC shares, while Prabhudas Lilladher is bullish on the company’s long-term prospects.
On a YoY basis, the profitability of capital goods companies is expected to be flat, but softening commodity prices and operating leverage could lead to an improvement sequentially. The pack could witness moderate growth in net profit on a yearly basis, most analysts believe.
Motilal Oswal is bullish on KEC has recommended buy rating on the stock with a target price of Rs 450 in its research report dated January 29, 2021.
Net Sales are expected to increase by 10.4 percent Y-o-Y (up 10.2 percent Q-o-Q) to Rs. 2,658 crore, according to Sharekhan.
PGCIL is facing challenges because of the new rules which call for competitive bidding. Earlier, the government used to hand projects on a platter to PGCIL. The change in rules is hurting PGCIL.
According to a company spokesperson, the company bagged these orders in last one month and KEC's total order book currently stands at about Rs 9,200 crore.
According to ICICIdirect.com, the current macroeconomic backdrop (high CAD, volatile currency depreciation and resultant inflationary expectation) will restrict the RBI from further loosening up interest rates in FY14. This will accentuate problems for capital goods companies.
Nirmal Bang has come with its March quarterly earning estimates for capital goods sector. According to the research firm, capital goods sector is expected to report subdued performance for an otherwise seasonally strong January-March quarter.
Engineering and construction firm KEC International recently won another batch of orders worth Rs 914 crore. Managing director Ramesh Chandak told CNBC-TV18 that the company's current order book is currently around Rs 10,000 crore.
Kotak Securities has come out with its report on infrastructure sector. According to the research firm, the Dedicated Freight Corridor Corporation of India (DFCC) received bids for package 1 & 2 (Rewari-Phulera, 283 kms & Phulera-Palanpur, 342 kms) of the Phase 1 of the Western Corridor in Dec 2012 and is likely to award them in the near future.
Nirmal Bang has come with its December quarterly earning estimates for capital goods sector. According to the research firm, capital goods companies are expected to report modest revenue growth of 1.0% YoY at Rs 219 bn.
KR Choksey has come with its September quarterly earning estimates for power and capital goods sector. According to research firm, the sales growth is expected on back of carry forward orders.
Prabhudas Lilladher has come out with his report in capital goods. According to research firm Capital goods index has outperformed the broader index by 5% over the last three months.
As the upcoming week is the stress test for the market to reveal whether the rally has any real steam on the upside, Madhumita Ghosh from Unicon Financial Intermediaries shares her expert call on various stocks queries posted through Moneycontrol.com's initiative 'Know Your Investment' (KYI).
