Stories
Three Capital Goods Stocks Surge Up To 7 Percent After Kotak Upgrades
- •Shares of Thermax Ltd., CESC Ltd., and KEC International Ltd. surged up to 7% following rating upgrades by Kotak Institutional Equities.
- •Kotak upgraded Thermax to a buy rating with a target price of ₹4,000, citing strong revenue growth expectations and favourable margins.
- •CESC was upgraded to add from reduce, although its target price was cut to ₹145 following a 35% correction from its peak.
- •KEC International received an add rating with a target of ₹400, supported by a strong transmission and distribution opportunity pipeline despite recent execution hurdles.
Key Questions Answered
Kotak Institutional Equities upgraded Thermax to a "buy" rating with a target price of ₹4,000 per share, while upgrading both CESC and KEC International to "add" ratings with target prices of ₹145 and ₹400 per share, respectively.
Kotak upgraded Thermax due to attractive valuations trading at 35 times estimated FY2028 earnings and expects a 16% revenue compound annual growth rate over FY2026-2029. Early-stage businesses like data centres and compressed biogas are anticipated to provide a 5-6% revenue CAGR boost.
KEC International's stock correction was driven by weak margin performance in non-T&D segments like civil and railways, slower water segment execution from delayed payments, a seven-month debarment from PGCIL tenders, and West Asian geopolitical execution disruptions.
