Strong Q4 show by ABB, Siemens are early signs of capex recovery

However, due to higher share of short-cycle orders, operating margins took a 100-200 basis point hit

Back in February when most capital goods companies showed improved capacity utilisation, it pointed to early signs of turnaround for the sector. Now that belief has gathered more strength, thanks to a strong March quarter performance from ABB India and Siemens India. Even as their net profit took a hit due to change in accounting norms, the key takeaway was the eye grabbing growth in order inflows. For ABB India, the 28 per cent year-on-year (y-o-y) growth in order inflow came from power transmission and distribution (T&D) segment, while pockets such as renewable energy and railways also supported it. A