Capital Goods Q3 Earnings Preview - Ordering Momentum To Gain Pace: Prabhudas Lilladher
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Prabhudas Lilladher Report
We expect Q3 FY22 to be a strong quarter led by-
pickup in execution,
higher order finalisation,
improving economic activity,
rising capacity utilisation level and
increasing capex spends by central government and private players.
We expect revenue growth of 20% YoY, for our coverage universe with product companies expected to report revenue growth of 22%, led by strong demand from both domestic as well as exports market, improving supply side constrain and higher realisation.
While project companies may report a revenue growth of 16% YoY, led by pickup in order execution. We believe risk of increasing freight cost and commodity price will be offset by new orders getting executed, improving operational efficiency and increasing focus on cost rationalisation measures, resulting in steady margins going forward.
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