Capital Goods Q2 Results Preview - Margin Expansion To Drive Profitability: Nirmal Bang

Nirmal Bang Report

We expect most companies under our coverage to deliver moderate growth on the back of execution of a robust order book. We expect topline growth of 11.8% YoY for companies under our coverage.

We are expecting 140 basis points YoY Ebitda margin improvement on the back of easing raw material costs, lower freight costs and better supply chain dynamics.

We continue to remain structurally positive on the sector from near-to medium term perspective on the back of recovery in the capex cycle and healthy order inflows, with the potential adverse impact on working capital being the key monitorable.

We expect Triveni Turbine Ltd. to deliver strong growth (plus 33% YoY) on the back of improved execution post strong order inflows. We expect Solar Industries India Ltd. to post topline growth of 9% YoY with realisations, AN price volatility and scale-up of defence segment being the key monitorables.

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