Over 10 years, five companies from this sector gained over 1,000%.

Shares of at least five capital goods companies have risen more than 1,000% over the past 10 years. According to market observers, the National Manufacturing Policy, liberalization of FDI norms and continued focus on infrastructure development have boosted the capital goods and industrial sectors.

With a growth of 1,736% in the last decade, Timken India has emerged as the top gainer in the BSE Capital Goods index. This was followed by Bharat Electronics (up 1,587%), Grindwell Norton (up 1,282%) and Honeywell Automation (up 1,259%).

Sharing his views on the outperformance of the capital goods sector, Alok Agarwal, Quant Director and Fund Manager, Alchemy Capital Management, said, “Over the last decade, several reforms and programs in India have contributed significantly to the growth of sectors like the capital goods sector consumer durables, industrial goods, capital goods and real estate.

He added that industrial and investment goods will also benefit from the introduction of the Goods and Services Tax (GST). “It is now easier for industrial and capital goods companies to do business thanks to a number of initiatives aimed at improving the business climate, including simplifying regulations, reducing bureaucratic red tape and improving the legal framework,” Agarwal said.

The data further highlighted that players like Praj Industries, V-Guard Industries, Carborundum Universal, Schaeffler India, Finolex Cables, ABB India, Siemens, Kalpataru Projects International, SKF India and Bharat Forge also gained between 500% and 1,000 during the same period %. period. Meanwhile, the BSE Capital Goods index has gained 361% in the last 10 years.

According to CARE Ratings, double-digit net sales growth was recorded in 11 of the 21 selected sectors in FY24 and included sectors such as aviation, automotive, cement, capital goods, infrastructure, real estate, hospitality and home appliances, among others. others. The strong growth in sales of capital goods, cement and infrastructure can be attributed to the government’s strong emphasis on public investment. Demand in capital expenditure sectors remains relatively high.
Dikshit Mittal, fund manager and senior equity research analyst at LIC Mutual Fund Asset Management, is positive on the capital goods, consumer goods, exports and automotive sectors.

“India is seeing an increase in capital expenditure. Companies present across the value chain in power generation and transmission, data centers, real estate and renewables are expected to perform well. Capital expenditure aimed at creating new production capacity can create jobs,” Mittal said, adding that the “China plus one” strategy adopted by developed countries could trigger a long-term growth in Indian exports. Export-oriented companies may re-enter the market soon after global inventories and logistical problems subside.

With elections approaching in several major global economies, including the US, market analysts believe it is important to be wary of the likely stance of the US Fed and other central banks. “Incremental reassessment across PSUs, capital goods, infrastructure, defense and railways seems unlikely given stretched valuations until policy clarity emerges,” brokerage Prabhudas Lilladher said in a report.