Kant described the latest quarterly results from energy sector players as a “decent set of numbers,” adding that “even Hitachi numbers were very good, but according to market expectations there were some setbacks.” He pointed out that transmission and distribution projects – especially those involving HVDC – are long-term in nature. This can make quarterly performance look uneven. “There will be some quarters that are lumpy and slow in nature, so that’s the nature of the business,” he explained.
Kant, however, cited valuation multiples as a primary concern. Many companies in the transportation and distribution segment trade at higher levels. “If you even extrapolate the numbers to FY30, [it] “It seems like this is being completely disregarded,” he said. Still, he asserted that long-term investors who believe in the structural expansion of the national grid will find value: Power Grid’s investment plans of ₹30,000 crore over the next few years, along with another ₹50,000 crore later, underline the growth runway. “If you don’t have… for valuation multiples, then both Hitachi Energy and Siemens Energy look quite attractive… long-term,” he added.Delays in implementation continue to plague parts of the sector. Kant attributed this to issues such as barriers to land acquisition and environmental clearances. “Last year was such a problem… not only for the companies laying conductors or making equipment, but also for the IPPs,” he said, citing NTPC Green’s delayed project timelines. While reforms are underway, he cautioned investors to be mindful of volatility and focus on the broader structural picture.
As for regulation in the power trading ecosystem, Kant expects more competition will reshape the landscape. “Almost all the forms of monopoly they enjoyed… will not be there,” he noted. As more and more players enter the day-ahead, term-ahead and real-time markets, he sees rates becoming increasingly negotiable. As a result, the stock in question appears “reasonably valued at current price levels,” with a likely move of around 5 to 10% depending on news flow.
Turning to the broader capital goods space, Kant expressed disappointment with the latest figures from companies such as ABB and Siemens. “The expectation was with all these structural tailwinds… things should be up,” he said. But private investments remain stagnant and fatigue persists in the electronics, electrification and industrial segments. He suggested that the sector should be revisited only after the fourth quarter, once there is clarity after the budget. With valuations still high, he says there is little reason to immediately chase these stocks.
In stark contrast, Kant remains enthusiastic about defense counters. “Certainly, we like all the defense counters… every drop needs to be addressed,” he said. The shift from India as a mere offset partner to an OEM-driven, Make in India-powered defense ecosystem is a long-term structural opportunity. Kant expects 64% of defense equipment to be produced domestically over the next three to four years, supported by growing order books with book-to-bill ratios that could be as high as four to five times. He highlighted HAL and BEL as top picks and expects HAL to reach a valuation of ₹1,000 per share based on FY27 earnings. “Absolutely a must in your portfolio, an allocation of 10-15% is what we recommend,” he added.
As global supply chains reorient and India intensifies its infrastructure efforts, the interplay of robust demand, slowed execution and steep valuations will continue to shape investor sentiment in power, capital goods and defense; each sector moves at its own pace within the country’s broader growth story.
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