The 4QFY19 quarter is likely to witness healthy revenue growth for capital goods and consumer durables/electricals sectors. The revenues of companies in our coverage universe are likely to rise 13.1% YoY in 4QFY19.
Private sector capex, which peaked in FY11 at INR3.7t, has been on a declining trend since the past seven years. And now, during FY18, it hit its lowest level since FY07, declining 13% YoY to INR1.5t (See Exhibit 1).
The 3QFY19 quarter is likely to witness healthy revenue growth for capital goods and consumer electricals sectors. The revenues of companies in our coverage universe are likely to rise 13.2% YoY in 3QFY19.
Demand for heavy equipment by Indian companies, an indirect measure of economic growth, is showing signs of rebound driven by government spending on railways, roads and smart cities ahead of the next general election.
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