Capital Goods - Sector seems to be coming out from multi-year slowdown. If a strong recovery happens, companies in this sector will have dual benefit of higher revenue and improved margins due to operating leverage.
Apart from decent financial performance during Jun-21 quarter, comments on order inflows in recent investor releases by few leading capital goods companies are strong:
Siemens
• All business segments record New Order growth over pre-pandemic 2019 levels.
• Highest Order Backlog ever
• Increased demand for digital technologies, including cybersecurity solutions
ABB
• Orders up 41% for the quarter and 11% for H1 Y-o-Y
CG Power
• Industrials - Order Intake for the quarter were higher at Rs 1058 crores recording a growth of 30% QoQ. Unexecuted Order book at the end of Jun 2021 was Rs 1691 crores
• Power systems - Order Intake for the quarter were higher at Rs 433 crores recording a growth of 22% QoQ. Unexecuted Order book at the end of Jun 2021 was Rs 1197 crores