Ideas for Profit: Post Q2 results, here are 3 engineering stocks to look

Ideas for Profit: Post Q2 results, here are 3 engineering stocks to look

November 22, 2018 0 By NewsTakers

Despite apprehensions about a capex cycle recovery, the engineering sector as a whole has surprised investors delivering strong growth in the July-September quarter.
On an aggregate basis, 10 companies that we have covered in this study have delivered 20 percent revenue growth as they benefitted from improved execution.
This is also reflected in their operating performance.
Companies have delivered a 21.5 percent growth in operating profits, with margins improving marginally to 17.31 percent.
On an aggregate basis, interest cost grew a mere 13 percent as companies were able to manage their working capital efficiently.
On a strong ground For engineering companies, the next half is going to be extremely important in terms of managing growth.
This also reflects in the overall tone as companies have maintained their revenue and earnings guidance.
Next year, once the elections are over and liquidity issues ease, they would have a larger market to address and thus growth would meaningfully pick up.
Also, it should be a beneficiary of changes in emission norms of coal-based power plants.
In case of Lakshmi Machine Works, while the textile machinery business continues to do well, its machine tools and foundry segment catering to automotive, railways, defence and earth moving equipment are in high demand.

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