Engineering, Capital Goods Q4 Preview - Execution To Remain Upbeat On Robust Order Backlog: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.For our capital goods coverage universe, we expect revenue growth momentum to continue in Q4 FY23 for both engineering, procurement and construction and product companies, led by robust order backlog, improving supply chain and hence overall pick-up in execution. We expect margin improvement would be restricted due to hardening of select commodity prices especially steel. Net working capital is likely to be stable or may see some improvement QoQ on the back of pickup in execution and lower inventory levels. Order intake for our coverage universe is expected to be flat on account of large base in Q4 FY22. Excluding Larsen and Toubro Ltd., order inflow is expected to grow 21% YoY. During the quarter, we saw pickup in the domestic transmission orders with Power Grid Corporation of India Ltd. receiving eight projects on tariff-based competitive bidding basis, Vande Bharat (200 train sets), hydrocarbon and thermal power plant awarding. We expect the momentum to continue going ahead, on the back of government thrust on infrastructure development, increase in private capex, and continued demand in new-edge sectors – such as data centre, metro, hydrogen, electric vehicle, digitalisation, energy efficiency, etc. We factor in revenue growth of 12% YoY (excluding L&T: 15% YoY) in Q4 FY23E for our coverage universe, given the steady execution pace. We forecast Ebitda/profit after tax growth at 15%/12% YoY, respectively. .Click on the attachment to read the full report:.Capital Goods Q4 Results Preview - Healthy Execution; Strong Order Inflows: Prabhudas Lilladher.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Engineering, Capital Goods Q4 Preview - Execution To Remain Upbeat On Robust Order Backlog: ICICI Securities

Domestic story on infra push remains intact though global issues may persist in near term.

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