BHEL our top pick in the cap goods & infra space: Suresh Mahadevan, UBS Securities

In an interaction with ET Now, Suresh Mahadevan, Head of Research, UBS Securities comments on the just out IIP numbers and gives perspective to the cap goods and manufacturing spaces.


How would you approach capital goods at this point in time?

Suresh Mahadevan: Generally, we are positive on capital goods and infrastructure because clearly these are beneficiaries. Within that, we like BHEL. We have L&T in our portfolio, but BHEL seems to be a top pick and we also have a company called GVK. So that kind of completes the infra capital goods part of a portfolio. It is a sector we are overweight on clearly. We do expect a lot of orders to come through for these companies. So it is something we are overweight on.

With respect to manufacturing, a view on that space?

Suresh Mahadevan: I have not had the chance to speak to our economist who is basically the one taking these views, but generally he has been highlighting through his lead economic index that some of the IIP numbers are going to roll over. So I do not think it comes as a big surprise to us.

We were expecting some amount of softness, though I understand consensus numbers were much high. I do not think we should be concerned by just one data point because there are several other positives, which are emerging both for the economy as well as the stock market perspective.