Cummins or Everest Kanto are good picks from capital goods sector: Rajesh Jain

Rajesh Jain, Market Strategist in an interview with ET Now talks about capital goods stocks.

You would buy into any of the capital goods stocks?

We would sustain the investment ideas we have been talking about over the last three months. Core volume growth in singular products. For Cummins, the sale of diesel engines and generating sets across segments continues to be the driver. It is a big supplier to its parent company.

There is a huge investment being made for capacity upgradation and then you have the second story in Everest Kanto, tremendous volume push because of the fillip to CNG fitments in automobiles, so you have two stocks in that space, which are running away because of sheer volume growth in a singular segment.

Thermax compliments the story of industrial capacity creation but the trend has been rather than putting up brand new units, more equipment is being put in for de-bottlenecking and balancing and we are all aware of Thermax product profile, so its very interesting to see a good performance out there from this company.

Capital goods we have not seen the kind of traction we would like to see and the stocks that will come up from behind and perform would be stocks like Siemens and ABB, which have brilliant international product portfolios and a lot of pending execution, which can give a tremendous fillip in the numbers in the next couple of quarters but single product retail investors would do very well to latch onto a Cummins or Everest Kanto.