Capital goods, cement good contrarian buys: Prabhudas Lilladher

How would you look at capital goods and BHEL in particular?

Sandip Sabharwal: The entire capital goods space falls into a category of I would say contrarian buys today because most of these companies have done well in terms of their performance, in terms of their sales and profit growth for this year. However, the order booking has lagged behind forecasts and whatever revised forecasts also companies had given in the last quarter results, those have not come through because of a variety of reasons. Because of this, we are seeing even the large-cap capital goods stocks come off by 30-40% from the top levels, which was seen just around 3-4 months back.

So I believe that the capital goods segment along with the cement sector as well as the construction sector, this is a contrarian bet for the next year where most of the concerns in terms of these stocks are already in the price and the growth outlook is not exactly bad if one takes for a reasonable timeframe of 12-24 months, so I would be a contrarian buyer in all these three sectors along with a sector like telecom, which also could be a contrarian bet for next year.