ABB, Siemens, Data Patterns, Bharat Electronics: Capital Goods index rises over 2%, here is why

Shares of capital goods companies were witnessing strong buying interest on Friday, February 20. The measure of capital goods companies on the BSE advanced as much as 2.3% or 1,391 points to hit an intraday high of 69,970 led by gains in Bharat Electronics, ABB, Siemens, Cummins India, CG Power, Hitachi Energy and Hindustan Aeronautics.

Gains in Bharat Electronics, ABB, Siemens, Cummins India, CG Power, Hitachi Energy and Hindustan Aeronautics collectively contributed over 700 points towards increase in the Capital Goods index, data from BSE showed.

Capital goods stocks came under buying interest after heavy electrical equipment maker ABB reported strong order book at the end of December quarter igniting investor optimism towards the companies in the capital goods space, analysts noted.

ABB recorded the highest fourth quarter orders in the last five years, with total orders at ₹4,096 crore growing 52% due to a strong development in the base business with additional support from the timing of large orders. The quarter benefited from large orders in the data centre, automotive, building and infra, railways and metals segments.

For calendar year 2025 ABB achieved highest ever orders worth ₹14,115 crore and revenue of ₹13,203 crore.

Its PBT margin came in at 16.9%, despite competitive intensity, currency and metal price headwinds and higher labour code related expenses, ABB said.

Global investment bank UBS said that Q4 orders, revenue and adjusted EBITDA were better than consensus estimates by 23%, 2% and 12%, respectively.

UBS added that sustained growth in base order run rates — rather than sporadic large-ticket wins — will be critical for a meaningful re-rating of the stock.

Macquarie termed 52% YoY rise in new orders as the key silver lining, albeit on a low base. However, it cautioned that higher import content continued to weigh on gross margins despite regulatory relaxations.

JPMorgan flagged earnings miss on net profit, revenue and margins relative to expectations, even as order momentum remained robust.

It expects the stock to react in a largely sideways manner, noting that strong Indian order growth had already been indicated by the parent earlier, limiting the element of surprise.

As of 12:45 pm, Capital Goods index was among the top sectoral gainers on the BSE, up 1.85% outperforming the SENSEX which was up 0.7%.