2 days ago
Motilal Oswal Favors Data Centres, Defence and Transmission Stocks
Motilal Oswal studied companies that build equipment and projects for industries such as power, defence and technology.
It believes data centres are creating strong demand right now.
It also expects more transmission and defence orders later in FY27.
Private companies have started spending more on industrial and infrastructure projects.
The brokerage likes Larsen & Toubro, Cummins India and GE Vernova T&D India among large companies.
It prefers Kalpataru Projects International, Bharat Electronics and Dixon Technologies in other parts of the market.
Dixon is expected to maintain its guidance to produce about 30 to 33 million units in FY27, excluding Vivo.
Company revenue growth was stronger than the brokerage expected in the first quarter.
However, investors still need to watch whether profit margins improve.
Motilal Oswal prefers Larsen & Toubro, Cummins India and GE Vernova T&D India among large-cap capital-goods stocks.
The brokerage favors Kalpataru Projects International, Bharat Electronics and Dixon Technologies in mid-cap, defence and EMS segments.
Data centres were described as the strongest near-term demand driver, with healthy enquiries and execution during the June quarter.
Transmission ordering was weak in Q1FY27, but the tender pipeline is improving and orders are expected from the second quarter.
Revenue execution grew 11% year-on-year in Q1FY27, while margins remain a key watchpoint as lower input costs and price hikes take effect.
- Who
- Motilal Oswal and the companies covered in its capital-goods, defence and EMS research.
- What
- The brokerage identified preferred stocks and sectors for FY27, emphasizing data centres, transmission and defence-led capital expenditure.
- Where
- The companies and sectors discussed are primarily in India.
- When
- The assessment covers FY27; the report discusses Q1FY27 and expects some order conversion from the second quarter and later in H2FY27.
- Why
- Motilal Oswal expects improving demand, tender pipelines, private-sector ordering and future defence approvals to support execution and earnings growth.
Key facts
- Large-cap picks
- Larsen & Toubro, Cummins India and GE Vernova T&D India
- Mid-cap pick
- Kalpataru Projects International
- Defence pick
- Bharat Electronics
- EMS pick
- Dixon Technologies
- Near-term demand driver
- Data centres
- Q1FY27 execution growth
- 11% year-on-year, compared with Motilal Oswal’s 5% estimate
- Dixon FY27 volume guidance
- Around 30–33 million units, excluding Vivo
Quotes
Motilal Oswal
Brokerage firm providing the cited capital-goods research report
“Defence ordering is also expected to pick up, with significant number of approvals coming through and project finalizations expected H2FY27 onwards.”
financialexpress.com
“Data centers remain the strongest near-term demand driver.”
financialexpress.com
Sources
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