Capex Theme News Today

"We believe the long-term capex story remains intact as we are seeing a massive shift in the capex cycle benefiting from the China plus strategy. For us the domestic capex story remains intact and consumers and corporate sentiments are resilient with a steady macro regime post-COVID, but we do not rule out the volatility as the hardening of USD and crude oil prices could pose a challenge in the interim."

"The last few months are more for campaigning/sloganeering rather than actual spending. To that extent, I feel that we may see a tempering of actual capex spend from the government over the next couple of quarters. A real pick-up would be once the new cabinet is in place. For now, we would like to take advantage of any volatility in the prices of capital goods companies to add some from the ‘flow category of companies to our portfolio."

“We will see a long capex cycle, but capex has to be divided in our view in two-three different buckets. First is the government capex which is central government capex, then there is state government capex. Then there is PSU capex, private capex and what we call MNC capex, which is a smaller part of the overall capex plays.”

“I would still stay with the larger banks because we believe that the growth in this country, which is now happening and happening at a rapid speed, probably the size of the balance sheet would matter. Some of the larger banks would be taking the biggest advantage of this situation.”

“This is sort of an opportunity in adversity. There are a lot of opportunities in the capital goods and allied sectors like bearings, power ancillaries. As a theme, if one plays capex very well, plus credit growth, plus a lot of the banks which support capex, this as a theme would play out very well. ”

Sanjiv Bhasin, Director at IIFL Securities, recommends having L&T and Thermax in a portfolio. He also suggests considering Bharat Forge as a quasi-play on ABB. Bhasin believes that the capital goods sector, particularly capex, is a lucrative space. He mentions that L&Ts announcement of a buyback at a high stock price reflects management confidence. Bhasin also expresses optimism about Diageo (United Spirits) and Radico Khaitan in the liquor industry.

Saurabh Mukherjea of Marcellus Investment Managers, expresses concerns about the broader PSU capex theme in India. He believes that the governments heavy spending on sectors such as roads, defence, and power is not supported by underlying tax collections. Mukherjea also discusses the potential performance of HDFC Bank and highlights the worries surrounding the PSU capex recovery. He mentions that the implosion in China could benefit Indias economy, and expresses optimism about the Indian IT serv...

FPIs have invested nearly $5 billion in infrastructure segments including capital goods, and construction and related sectors and a similar amount in FMCG, consumer durables and telecom over the past twelve months. In addition, the automobile sector, which is considered as nondiscretionary, has attracted $3.26 billion of investment. The cumulative weight of infrastructure and consumption play in the FPI equity portfolio reached a multi-year high of 29.6% at the end of the first fortnight of June...