Synopsis:
JP Morgan commented positively on the Capital Goods sector, staying bullish on Thermax, Cummins and CG Power, while remaining cautious on Siemens, BHEL, ABB and Praj Industries.
JP Morgan sees selective opportunities in the capital goods sector despite a temporary slowdown, with capex expected to grow 10–11% over the medium term and stock prices already reflecting much of this deceleration.
A 10% growth environment still provides scope for healthy earnings, and the brokerage prefers companies with strong growth visibility like L&T, CG Power, Cummins, and Thermax, noting that trading multiples are now more attractive.
Industry Overview
The capital goods industry produces machinery, equipment, and tools that are used to manufacture other goods and construct infrastructure, making it an important driver of economic growth. It serves industries such as power, construction, mining, oil and gas, railways, defence, and manufacturing.
Growth in this industry is closely related to capital expenditure (capex) trends, government infrastructure spending, private investments, and industrial activity. In India, the sector is growing due to increased emphasis on infrastructure development, Make-in-India initiatives, production-linked incentives (PLIs), and increased automation. Typically cyclical in nature, it benefits during economic upturns when industries and governments increase spending on capacity expansion and modernization.
Following are the stocks with New Target price given by the Analyst
1. Thermax Ltd
Thermax Limited provides integrated solutions across the energy, environment, and chemical sectors. Its offerings cover a wide range of products and services, including boilers, heaters, absorption chillers, heat pumps, power plants, solar equipment, air pollution control systems, water and waste recycling plants, ion exchange resins, performance chemicals, and associated services.
The company has a market capitalization of Rs. 39,624.24 crore and is trading at Rs. 3,325.40. JP Morgan has maintained an Overweight rating on the stock with the target price of Rs. 3,869, suggesting a potential upside of 16.34 percent from the current price.
2. Cummins India Ltd
Cummins India Ltd., part of Cummins Inc. USA, designs, manufactures, distributes, and services diesel and from 2.8 to 100 liters, diesel and alternative-fueled power generator sets of up to 3000 kW (3750 kVA), and related technologies. Serving as a key power solutions provider across industries, the company focuses on continuous innovation to deliver reliable, advanced products.
Cummins India Ltd has a market capitalization of Rs.1,12,920.19 crore and its stock is trading at Rs. 4,074.30. JP Morgan has maintained an Overweight rating on the stock with the target price Rs. 4,649, suggesting a potential upside of 14.1 percent from the current price.
3. CG Power & Industrial Solutions Ltd
CG Power and Industrial Solutions is a global engineering leader with an 87-year history of providing comprehensive electrical energy solutions to utilities, industries, and consumers. It operates 18 manufacturing units in India and Europe, serving railways, industrial sectors, and consumer appliances through two main segments, Power Systems and Industrial Systems, focusing on efficient and sustainable energy management.
The company has a market capitalization of Rs. 1,24,911.57 crore and is currently trading at Rs. 792.70. JP Morgan has maintained an Overweight rating on the stock with the target price Rs. 840, suggesting a potential upside of 5.97 percent from the current levels.
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4. Praj Industries Ltd
Praj Industries Ltd., established in 1983, is a global leader in biotechnology and engineering, providing sustainable solutions in bioenergy, water treatment, process equipment, breweries, and wastewater management. The company focuses on environmental, energy, and farm-to-fuel technologies and has an international presence with offices in Thailand, the Philippines, and the USA.
The company has a market capitalization of Rs. 7,223.85 crore and is currently trading at Rs. 393.10. JP Morgan has maintained a neutral rating on the stock with the target price of Rs. 403, indicating a potential upside of 2.52 percent from current levels.
5. ABB India Ltd
ABB India is a technology leader in electrification and automation, providing engineering, products, solutions, and services that enhance industrial efficiency and support a sustainable, resource-efficient future. Its technologies are widely used in India’s infrastructure, including 80% of metro networks, covering both automation and power sectors.
ABB India Ltd has a market capitalization of Rs. 1,13,582.89 crore and its stock is trading at Rs. 5,358.90. JP Morgan has maintained a neutral rating on the stock with target price of Rs. 5,639, indicating a potential upside of 5.23 percent from current levels.
6. Siemens Ltd
Siemens Limited provides products and integrated solutions for manufacturing and process industries, intelligent infrastructure, and building systems. Its offerings include drives, efficient and clean power generation for fossil fuel and oil & gas sectors, as well as the transmission and distribution of electrical energy. The company also supports passenger and freight transportation through rail vehicles, rail automation, and rail electrification systems.
The company has a market capitalization of Rs. 1,18,025.46 crore and trades at Rs. 3,313.80. JP Morgan has maintained an underweight rating with target price of Rs. 2,795, indicating a potential downside of 15.65 percent from the current market price.
7. Bharat Heavy Electricals Ltd
Bharat Heavy Electricals Ltd. is a comprehensive power plant equipment manufacturer involved in the design, engineering, production, installation, testing, commissioning, and maintenance of a broad range of products and services for key sectors such as power, transmission, industry, transportation, renewable energy, oil & gas, and defence. It is India’s flagship government-owned engineering and manufacturing company.
Bharat Heavy Electricals Ltd has a market capitalization of Rs. 80,634.14 crore and its stock is trading at Rs. 231.60. JP Morgan has maintained an underweight rating on the stock with target price of Rs. 185, indicating a potential downside of 20.12 percent from current levels.
Written by Akshay Sanghavi
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