Capital good companies should be able to execute projects: Vikas Khemani

Vikas Khemani, EVP & Head - Institutional Equities, Edelweiss Securities Ltd. in an interview with ET Now talks about capital good and manufacturing companies.

Given the availability of money that now corporates have, particularly from the capital goods space, the manufacturing space and the kind of numbers that you saw for a couple of these major capital good companies, how are you reading into their business profile right now given the execution risks that still loom?

If you just see most of the capital goods companies, construction company, they have a strong order book build out. We have seen a very strong traction on the order book side and that obviously reinforces the confidence that the investment cycle is strong.

Having said that, the execution risks are always there, they have been there but if the credit flow is smooth and if you do not have any liquidity crunch, then I guess I would not see too much of risk on the execution because most of these companies have delivered in the past and one of the reasons why we have been also reasonably positive on the capital goods, engineering and construction sector is because of this traction in the order book, which essentially reduces the pressure on the pricing and the margins kind of tend to expand when the order book expands over a period of time, so we remain quite positive on the entire space.