Motilal Oswal sees 15–20% upside in L&T and BEL amid strong sector tailwinds
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Larsen & Toubro: Buy| Target Rs 4100| LTP Rs 3540| Upside 15%
Bharat Electronics: Buy| Target Rs 490| LTP Rs 409| Upside 20%
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com .)
India's capital goods sector remains well-positioned, driven by a confluence of strong macro enablers and sector-specific catalysts.A robust order book across key verticals such as defence, power transmission & distribution (T&D), renewables, and infrastructure is supporting steady execution visibility.This, coupled with government policy support and easing commodity prices, has created a favourable backdrop for companies operating in the sector.Ordering momentum continues to be resilient, led by fresh wins in the defence and infrastructure segments. Recent months have seen strong order inflows, including large-scale projects in high-speed rail, urban infrastructure, and power systems.The railways segment, which experienced a slowdown in the previous fiscal, is now showing signs of early recovery.Furthermore, multiple players have reported sizable contract wins across both domestic and export markets, reinforcing confidence in the near-term execution pipeline.A notable driver is the government's approval of emergency defence procurement worth ₹400b. This is the fifth such tranche since 2019 and is aimed at fast-tracking acquisitions of critical systems such as drones, missiles, and munitions.These emergency authorizations come with strict delivery timelines and are expected to significantly benefit companies with indigenous manufacturing capabilities.The inclusion of 28 additional weapon systems for emergency procurement further expands the opportunity set for defence suppliers.Margins across the sector are expected to vary, with EPC companies benefitting from the phase-out of low-margin legacy projects, and product companies increasingly focusing on higher-value segments and deeper market penetration.Importantly, commodity price corrections in zinc, aluminium, and copper are expected to support cost structures and provide cushion to profitability going forward.On the global front, Indian companies are looking to tap into emerging opportunities in the US, Europe, and the Middle East.With an established track record in quality and cost competitiveness, engineering and defence firms are accelerating their export push, especially in renewable energy and advanced defence platforms.Overall, the outlook for the capital goods sector remains constructive. While a broad-based revival in private capex is still awaited, strong public investment, policy initiatives like Make in India, and increasing global defence and infra spending are expected to sustain growth momentum in the medium term.Larsen & Toubro (LT) remains well-positioned to capitalize on a strong international prospect pipeline (INR19t), stable domestic order flows, and an improving return profile. Core EPC revenue is expected to grow at a 15% CAGR over FY25–28, with EBITDA/PAT CAGR of 18%/21%.Despite geopolitical headwinds and oil price volatility, international markets—especially in the Middle East—remain promising.RoE improved to 16.3% in FY25, supported by better capital allocation and working capital efficiency.LT's diversified exposure across infrastructure, energy, and hi-tech manufacturing supports long-term growth. Maintain BUY on strong execution, visibility, and return metrics. BEL ) is poised for strong growth, driven by a robust order pipeline and increasing indigenization in defense electronics. The company expects INR270b in order inflows and 15% revenue growth in FY26.Significant orders like QRSAM and next-generation corvettes are anticipated in FY26-27, ensuring revenue visibility. Enhanced indigenization and consistent R&D spending will sustain strong margin performance.With a healthy cash surplus of INR94b as of FY25, BEL has ample scope for capacity expansion, we expect a CAGR of 17%/16%/19% over FY25-27.(The author is Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd : Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
16 minutes ago
- Business Standard
India's oil imports from Russia hit 11-month high in June amid war fears
India's import of crude oil from Russia rose to an 11-month high in June as refiners topped up tanks amid the Israel-Iran war, analysts said. India imported 2.08 million barrels per day (bpd) of Russian crude in June, the highest since July 2024, according to vessel tracking data from global commodity market analytics firm Kpler. "While India's global imports of crude oil dropped by 6 per cent in June, Russian volumes saw an 8 per cent month-on-month rise to their highest levels since July 2024," European think tank Centre for Research on Energy and Clean Air said. "More than half of these imports from Russia were made by three refineries in India, which also export refined products to G7+ countries." India imports more than 85 per cent of its requirement of crude oil, which is turned into fuels like petrol and diesel in refineries. Traditionally, the Middle East was the main source, but Russia has been the mainstay supplier for nearly three years now. After much of the West shunned Russian crude following Moscow's invasion of Ukraine in February 2022, Russia began offering steep discounts to attract alternative buyers. Indian refiners seized the opportunity, turning Russia, once a marginal supplier, into India's largest source of crude oil, overtaking traditional suppliers from West Asia. Russia now accounts for as much as 40 per cent of India's oil imports. In June, India imported approximately 8,93,000 barrels per day (bpd) of crude from Iraq - its second-largest supplier - marking a 17.2 per cent month-on-month decline. Saudi Arabia followed with 5,81,000 bpd (largely unchanged from May), while imports from the UAE rose 6.5 per cent to 4,90,000 bpd. Iraq accounted for 18.5 per cent of India's oil imports, followed by Saudi Arabia at 12.1 per cent and the UAE at 10.2 per cent. The US remained India's fifth-largest crude supplier, with import volumes of approximately 3,03,000 bpd and a 6.3 per cent market share, according to Kpler. CREA said China bought 47 per cent of Russia's crude exports in June, followed by India (38 per cent), the EU (6 per cent), and Turkiye (6 per cent). "In June, India remained the second-largest purchaser of Russian fossil fuels, importing fossil fuels worth 4.5 billion euro. Crude oil accounted for 80 per cent (3.6 billion euro) of these imports," it said. Separately, S&P Global Commodity Insights India's crude oil inflows from the US surged more than 50 per cent in the first half of 2025 compared to H1 2024, while flows from Brazil rose 80 per cent over the same period, signalling a growing affinity of its refiners for non-OPEC crudes as New Delhi looks to widen its source of supplies. According to data from S&P Global Commodities at Sea, India imported 2,71,000 bpd of crude oil from the US in the year's first half, up around 51 per cent from 1,80,000 bpd imported in the same period in 2024. Indian refiners have been used to relatively large volumes of US crude in the past, but volumes had slowed down over the past two to three years when India turned to Russian crude. India's appetite for US crude is again showing signs of revival amid renewed diplomacy with the new US government. Crude inflows from Brazil posted the sharpest growth in the six-month period, rising about 80 per cent year-over-year to 73,000 bpd from nearly 41,000 bpd. Russia retained the position as India's top crude supplier in January-June, with shipments of 1.67 million bpd, up marginally from 1.66 million bpd in the same period a year earlier.
News18
17 minutes ago
- News18
New Renault Boreal SUV Unveiled, Here's Everything You Need To know
Last Updated: The upcoming offering is a part of the company's four-car game plan. It is expected to hit the Indian shore somewhere in 2026. After teasing the customers with a C-segment model teaser, the top carmaker Renault has finally revealed its upcoming SUV named Boreal. It has been reported that the model will be sold in more than 70 markets, including the Indian market, followed by Latin America, Turkey and more. The upcoming offering is a part of the company's four-car game plan, which will be introduced in the International market. The model is expected to hit the Indian shore somewhere in 2026. The report says that the company has developed the SUV specifically for the markets, barring Europe. It will be a seven-seater SUV, based on the ultra-flexible platform. Talking about the overall dimension, the model will feature 4.50 meters in length, 1.84 meters in width, and will have a wheelbase of 2700 mm. It will come with shorter overhangs, offering a maximum cabin space. When it comes to the key highlights, it will get a body-colored grille with a backlit NouvelR emblem, featuring fully LED elements at both ends, decent-sized fenders, and 19-inch alloy rims. These elements will make it look superior in the segment, and are likely to capture the masses, especially in the Indian market. Engine and Power Under the hood, the Boreal will use a robust 1.3-litre turbocharged engine. It will be offered in both petrol and flex-fuel variants, depending on the market. The latter will churn out a maximum power of 160 bhp and a peak torque of up to 270 Nm. The unit will be mated with a 6-speed dual-clutch transmission. About the Author Shahrukh Shah Get the latest updates on car and bike launches in India — including reviews, prices, specs, and performance. Stay informed with breaking auto industry news, EV policies, and more, Also Download the News18 App to stay updated! Location : New Delhi, India, India First Published: July 13, 2025, 13:32 IST
Time of India
32 minutes ago
- Time of India
India's Russian oil imports hit 11-month high in June
India's crude oil imports from Russia climbed to their highest in nearly a year in June, as refiners stocked up amid tensions in West Asia, particularly the Israel-Iran conflict, reported PTI. According to data from Kpler, a global commodity tracking firm, India imported 2.08 million barrels per day (bpd) of Russian crude last month, the highest since July 2024. 'While India's global imports of crude oil dropped by 6 per cent in June, Russian volumes saw an 8 per cent month-on-month rise to their highest levels since July 2024,' the Centre for Research on Energy and Clean Air (CREA) said in a note. 'More than half of these imports from Russia were made by three refineries in India, which also export refined products to G7+ countries.' India depends on imports for over 85 per cent of its crude oil needs. While the Middle East was historically the dominant source, Russia has steadily emerged as the top supplier over the past three years. After Moscow's invasion of Ukraine in February 2022, Western sanctions pushed Russian producers to offer deep discounts, prompting Indian refiners to shift gears. Russia now accounts for roughly 40 per cent of India's total crude imports. In contrast, imports from Iraq — India's second-largest oil supplier — fell to 893,000 bpd in June, a drop of 17.2 per cent from the previous month. Saudi Arabia held steady with 581,000 bpd, while shipments from the UAE increased 6.5 per cent to 490,000 bpd. Iraq made up 18.5 per cent of India's oil imports, followed by Saudi Arabia at 12.1 per cent and the UAE at 10.2 per cent. The US remained in fifth place with 303,000 bpd and a 6.3 per cent share, according to Kpler data. Live Events CREA's analysis of Russian exports in June showed that China took 47 per cent of Moscow's crude, followed by India at 38 per cent. The European Union and Turkiye each accounted for 6 per cent. 'In June, India remained the second-largest purchaser of Russian fossil fuels, importing fossil fuels worth 4.5 billion euro. Crude oil accounted for 80 per cent (3.6 billion euro) of these imports,' CREA said. Meanwhile, data from S&P Global Commodity Insights showed India's crude imports from the US surged more than 50 per cent in the first half of 2025 compared to the same period last year, a sign that Indian refiners are once again warming up to non-OPEC sources. The rebound also reflects improving ties with the new US administration. India imported 271,000 bpd of US crude between January and June this year, up from 180,000 bpd in H1 2024. Shipments from Brazil saw the sharpest rise, growing 80 per cent year-on-year to 73,000 bpd from 41,000 bpd. Despite the growing diversification, Russia remained India's top crude supplier in the first half of 2025, delivering 1.67 million bpd, slightly higher than the 1.66 million bpd recorded in the same period last year. With inputs from PTI
