Stocks of the companies which are directly linked with the Indian economy have been in action as we move closer to the union Budget 2022. Zee Business’ Kushal Gupta explains the reason behind this occurrence.

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Economy stocks like Larsen & Toubro Limited and Thermax Limited have seen a significant movement over the past one month. While the former has risen by over 12 per cent, the latter has seen price appreciation of 30 per cent, Gupta says.

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In 2022, stocks from the capital goods segment have seen high traction and investors are finding these stocks quite lucrative, he adds.

L&T has grown by 7 per cent over two weeks while Thermax shares have gone up by 15 per cent.

Meanwhile Bharat Heavy Electricals Limited (BHEL) shares have been up 6 per cent in two weeks and 7 per cent over 1 month period.

Other stocks like Cummins India and KEC International Limited have gone up by 11 and 13 per cent respectively during a one month period.

The reason behind this is Budget 2022 and the economy related stocks are doing well, he further said.

The government has also been putting a lot of emphasis on the infrastructure and we could see a higher allocation in these sectors, he further said.

The capital goods sector is likely to benefit from this.

Another important reason is the Q3 earnings results. The prices of stee and cement have gone down in the last 3-4 months which could improve their EBITDA and their bottomline. The companies have also been able to improve their execution with better capacity utilization.

The third big reason is the outlook for Q4F22 which is strong. Most capital goods companies have received order in the beginning of 2022.

The expectations of FY22 is also strong, he said.

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Even Zee Business Managing Editor Anil Singhvi has advised investors to keep a watch on this space.