Powering Ahead ; the Engineering Sector Is Bursting with Order Flows, Notwithstanding the Economic Crunch. Time to Add Them to Your Portfolio.

Summary

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If there was a doubt over whether engineering companies face the prospect of a dip in earnings due to the economic slowdown, it's time to cast those uncertainties aside. Apart from returning stellar performances in the first quarter of the current financial year (2008-09), the engineering sector, in fact, saw a significant increase in the size of its order book. This promises to keep its mills grinding for some time more, and its profitability on course.

Little surprise then, the sector got a boost lately. The BSE Capital Goods Index, which lagged the Sensex over the last one year, has outperformed the bellwether since July 1, 2008. The Capital Goods Index returned 26 per cent against the Sensex's 15 per cent till August 5, 2008. A significant development for engineering and capital goods companies in the first quarter of 2008-09 is that the economy has not contracted too much just yet.

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Extract

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Powering Ahead ; the Engineering Sector Is Bursting with Order Flows, Notwithstanding the Economic Crunch. Time to Add Them to Your Portfolio.

Demand for capital goods and engineering services is still robust despite the rising interest costs, and companies have not curbed their appetite for expansion. Order books fo...

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