 "Capital goods firms' revenues seen up 10% YoY in Q3: Elara Capital")
Elara Capital expects its capital goods coverage universe to report a 10 per cent year-on-year (Y-o-Y) revenue growth in the third quarter of the financial year 2025-26 (Q3FY26), supported by healthy industrial demand and robust execution.
Among large names, ABB India’s revenue is expected to grow 9 per cent Y-o-Y, led by strong execution in the electrification segment, while Siemens’ revenue may rise 12 per cent. Thermax and Cummins are seen posting a 6 per cent revenue growth each, with Thermax impacted by muted execution in the industrial infrastructure segment and Cummins facing a high base.
KEI Industries' revenue is projected to jump 31 per cent, driven by strong infrastructure demand in cables and wires, aided by a sharp rise in copper prices. BEML’s revenue may grow 6 per cent amid slower execution of railway orders, while RITES is expected to post a 5 per cent increase. KEC International’s revenue is likely to rise 14 per cent Y-o-Y on healthy transmission and distribution execution, Elara said.
Overall, the brokerage expects its capital goods universe to clock 12 per cent sales growth in the quarter, while consumer electricals and durables are seen growing 22 per cent Y-o-Y.
The brokerage said its preferred stocks in the space include BEML, Zen Technologies, Amber Enterprises, Kaynes Technology, RITES, Bharat Electronics, Eureka Forbes, and KEI Industries.
On order inflows, Elara Capital noted that inflows for its capital goods companies, excluding Larsen & Toubro, declined 20 per cent year-on-year in the third quarter. Defence order inflows fell 52 per cent, largely due to a large order booked by Hindustan Aeronautics in the base quarter. Excluding the large order booked by BHEL in the current quarter and Hindustan Aeronautics in the base quarter, order inflows were down 6 per cent Y-o-Y. ALSO READ | NLC India rises to a 1-month high; Co transfers assets to green energy arm
Durables growth seen muted
Elara Capital expects consumer electricals, durables, and electronics companies to post a 14 per cent Y-o-Y sales growth in the Q3FY26, led by electronics and electronics manufacturing services (EMS). Room air conditioner makers are likely to see a moderate recovery in Q3 compared with Q2, despite higher channel inventories and the upcoming change in Bureau of Energy Efficiency norms, Elara said.
Voltas’ revenue is expected to decline 6 per cent Y-o-Y, while Amber Enterprises may post a modest 2 per cent growth, driven by a sharp rise in its electronics segment. Kaynes Technology’s revenue is projected to surge 48 per cent on strong industrial demand and a robust order book. Dixon Technologies may report an 11 per cent increase, supported by strong growth in mobile phones and recent acquisitions.
Elara Capital said its preferred picks in the consumer electricals and electronics space include Amber Enterprises, Kaynes Technology, Dixon Technologies, and Eureka Forbes. ==========
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