Capital goods stocks not cheap; all eyes on recovery in capex cycle: Parag Thakkar

In a chat with ET Now, Parag Thakkar, Head Institutional Sales, HDFC Securities, shares his views on capital goods stocks.

ET Now: Stocks of white goods/capital goods such as Symphonys and Schneiders are not cheap in valuations. What is your view on these scrips?

Parag Thakkar: True. They are not cheap right now because there is no earnings on table.

Nothing great has happened in the capital goods space in last two-three years which could impress markets.

Take an example of Schneider. We all know how big it is. It is a global major with huge capabilities. The company's annual report suggests you that if the smart city thing picks up in India, they are best positioned to capture the theme.

But, right now there are no numbers because there is no smart city. The point I want to make is that market is slowly and gradually believing that we are likely to see a big revival in capex cycle.
You are on the verge of beginning of that cycle. But, it is at least one or two quarter away from now.

For example, Siemens recently said that it got a Rs 450-crore order from railways. So, good things have just started. Therefore, initially, when the earnings are still not there, it is very simple for the stock market guys to pick it up.