Blue Star, Voltas to gain on higher consumer spend: Sanjeev Zarbade

In a chat with ET Now Sanjeev Zarbade, Vice President-PCG Research, Kotak Securities shared his view on the capital goods sector.

ET Now: Any stocks that stand on your radar because I think the capital goods names have started to come to the party out here. I know you track that space very closely, except for L&T which is trading at the lows ahead of its numbers?

Sanjeev Zarbade: The sector has to some extent started to gain momentum but we are very positive on the consumer electrical and consumer durable stocks. We have, in fact, released a small call wherein, we have indicated that we are positive on Blue Star, Voltas and Crompton Greaves Consumer. This is on the base of the strong numbers that have been reported by Hitachi Home and generally, we are very positive on the room air conditioning side.

Both these companies Blue Star and Voltas they have their quarterly numbers announcement early next week and we look forward to good numbers from these two companies. And even on longer term, the room air conditioner space is where we are very positive because of the low penetration of room air conditioner within the household ownership category, so we continue to be positive.

We have started to see government spending now really building up and if the consumer demand really starts picking up and continues to stay that way, we would see that translating into investment demand for greenfield and brownfield projects that should lead to more orders for companies like Larsen & Toubro.

So in the near term, Blue Star, Voltas we are positive but over medium term Larsen & Toubro is what we would be looking at.