India’s Capital Goods stocks led by Thermax and Hitachi Energy India are down 9% each after the Union Budget announcements on Saturday, February 1.CompanyValueChange%ChangeCapex spending target was set at ₹11.21 lakh crore for financial year 2026, which was a 0.9% increase from the budget outlay in financial year 2025.The BSE Capital Goods index is trading with losses of 4% on Monday. Along with Hitachi Energy and Thermax, shares of Siemens are also down over 7% on Monday, and are three among the top five losers on the Nifty 500 index as well.
Brokerage firm Motilal Oswal has downgraded Hitachi Energy to “sell” from its earlier rating of “neutral” and has cut its price target on the stock to ₹10,500 from ₹13,300 earlier.Thermax has also been downgraded by the brokerage to “sell” from “neutral” earlier and the price target there has been cut to ₹3,500 from ₹4,400 earlier.Siemens has been downgraded to “neutral” from “buy” and its price target has been cut to ₹6,300 from ₹7,500 earlier.Motilal Oswal wrote in its note that private capex across base industries is yet to show signs of meaningful improvement.
“We believe that the industrial sector will face challenges in growing inflows at the same pace,” Motilal Oswal’s note said.The brokerage sees a higher impact to companies with a greater exposure to railways, water, road construction and private capex. However, companies with a greater focus on power T&D, renewables, defence and higher-growth areas are placed betterm the brokerage said.It is now product to be selective within the capital goods sector and Motilal Oswal is baking in lower valuations due to lower government capex and lower-than-expected private capex so far.Within the largecap industrials, Motilal Oswal bets on L&T, ABB India and Cummins India.L&T’s price target has been cut by Motilal Oswal to ₹4,100 from ₹4,300 earlier, while ABB’s target is cut to ₹7,200 from ₹8,500 earlier. Cummins India’s price target has been cut to ₹4,100 from ₹4,250 earlier.Within defence, Motilal Oswal prefers Bharat Electronics with a price target of ₹360.“Of course it (Capital Goods) will derate. I have been betting against that because those companies don’t deserve 40 and 50 multiples because nowhere in the world, consumer also don’t deserve, but consumer have higher multiples for years and in other countries too they are higher in consumer than in infra and road building and water treatment. So that is just the reality,” Samir Arora of Helios Capital said.Shares of Hitachi Energy are down 8.2% at ₹11,200, while those of Siemens are down 7.7% at ₹5,310. Thermax shares are down 7% at ₹3,603.
