Credit Suisse has come out with a report on capital goods sector. Their preferred list in the capital goods space is Larsen and Toubro (L&T), ABB, NTPC and Siemens.
On L&T, because of cheaper valuations compared to the market, Credit Suisse has raised the target price to Rs 2,200 from Rs 1,900.
On ABB, the clearest play on the capex cycle, the firm has raised the target price to Rs 2,250.
Credit Suisse believes that the renewable capacity addition will be positive for NTPC. So, the firm has raised the target price on NTPC to Rs 180.
Siemens is a pure play on automation. There, the target price is raised to Rs 2,400 by Credit Suisse.
The firm has seen several drivers of the investment cycle and believes that breadth will make it larger and sustainable with leadership coming in from three major areas- one is manufacturing, two is public spend on few large sectors, and three is energy transition.
In the past cycle, ABB and Siemens have been the clear leaders and they benefit, given their more discreet manufacturing, automation and efficiency focus.
Watch the accompanying video of CNBC-TV18’s Nimesh Shah for more details.
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(Edited by : Dipikka Ghosh)
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