Capital goods names like Cummins, Voltas and Engineers India to fetch returns: Manish Sonthalia

In a chat with ET Now, Manish Sonthalia of Motilal Oswal shares his views on the capital good space.

ET Now: How would you approach capital goods names?

Manish Sonthalia: We have Cummins in our portfolio. Going into FY15 and FY16, the export story is going to play out quite well. The low horsepower engines, which they are now manufacturing at their Fulton plant, will see some decent growth from around Rs 400 crore to Rs 1000 crore by FY16.

CPCB norms coming in later this year would mean that there would be pre-buying. We are looking at closer to around 15%-16% earnings growth over next two years. We are looking at Rs 30 of EPS by FY16.

Another name that we like for quite sometime is Voltas. One cannot be very generic about the capital good space, but the stock prices have reacted in that sector.

They are fundamentally sound companies. If you bought them, you would stand to gain. Engineers India, which we have in our portfolio, was just languishing and all of a sudden (within a matter of a one and a half month) it has moved up 35%. But, this is still cheap at current levels.

These are some of the names that we have in our mid-term portfolio.