Slowing capital goods spending to impact L&T in long term: Avendus Capital

In a chat with ET Now, Girish Nadkarni, Executive Director, Avendus Capital Pvt. Ltd., shares his trading ideas.

What is the call on L&T? Why is this underperforming?

The first reason is that the spending on capital goods is likely to be lower with infrastructure projects slowing down significantly and the second is with interest rates moving up, there is less incentive to set up new projects. So, from a long-term perspective, both these factors tend to impact it. The other part is that L&T derives a large part of its revenues from EPC, and EPC companies have been badly hammered in the market in the past 2-3 months. It is more because of the fallout of these factors that L&T is down.