We remain bullish on L&T and BHEL, says Gautam Chhaochharia

In a chat with ET Now, Gautam Chhaochharia, Head-India Research, UBS, shares his views on the capital goods sector.

ET Now: As a house, you guys are bullish on the cap goods space. Which are your top picks from the cap goods universe and what makes you so bullish on the sector?

Gautam Chhaochharia: We are not overall bullish in general on the sector-specific names. So we remain bullish on L&T and BHEL. These two still remain our top picks in that space and again it is a question of the building blocks in the investment cycle being in place and that gives us confidence from a medium-term perspective, unlike say a year back, and not just from the perspective of just having the election around as an election trade.

So those building blocks for investment cycle was the key reason for us remaining positive on these two names specifically and these two stocks have done well, but again from a two to three-year perspective, there is still a long way to go.