Friday 15 November 2013

Capital Goods: Is worst over?

Capital goods sector have been worst Performer since last two years,Though we have seen Nifty making Life time  Highs,capital goods companies still Find them abandoned. These scrips have been beaten down Badly,and are available at appealing Valuations. When Bse sensex is compared with capital goods index,we find that this sector has under performed,metal and power stocks have given negative returns even when the overall index gained.Stocks like Jindal steel,Bhel, Gail has given negative returns and coal India also falls in this category.
The rally which we have seen has been more or less concentrated on few scrips which were having some or the other link to forex gains in one or the other way,foreign investors who are considered to be informed investors are buying into only those companies.one such example can be Arvind which has rallied quiet a lot,as it is beneficiary of rupee depreciation. Retail investors only considered IT companies as beneficiary and only restricted themselves to that sector but now people are turning into export driven companies which got Benifited through currency woes.
Some scrips in capital goods indrustry look promising like Bhel, ABB, Engineers India,These stocks never Participated in rally,so if we can expect it to be active once the government change is conformed or IIP data picks up,so these scrips though are shorting ideas,one can accumulate at significant dips or in a correction with 1-2 years view with expected returns of atleast 30-40%.

12 comments:

  1. Good write Up hari ji.
    Articles like this are very useful for smal investors who think they are lost in markets.
    Regards
    Nandagopal.

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  2. Thanks sir for nice article,sir do you think cement sector is also beaten down? which would you prefer

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    Replies
    1. Cement sector indirectly depends upon infra and government spending,though they have not participated in rally,worst seems over.Acc and ambuja operated by holicim are best bets.

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  3. sir keep giving us your insights like above regularly please,it will help us a lot.a request only

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  4. Sir Needed your guidance to select best scrip in banking for long term

    Snjay

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    Replies
    1. Allmost many psbanks are trading below their book value,pick some after rbi policy.

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  5. Thanks sir for nice write up

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  6. Thanks for good write up sir

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  7. Good article hari...

    Its quite nice observing your calls in such a volatile market.

    ReplyDelete

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