Majority of the engineering stocks are trading in the green with Jyoti Structures and Emco being the major gainers. As per a leading financial daily, engineering companies are banking on a revival in domestic sales to boost profits and expand margins. The recent measures announced in the Union Budget such as revival of stalled projects, higher spending on infrastructure such as roads and highways and emphasis on building smart cities are expected to boost orders for capital good companies. Engineering behemoth, Larsen & Toubro (L&T) expects 75% of the order inflows from the domestic sector by the end of FY15. For the June 2014 quarter, L&T witnessed 44% of its order inflows from international projects. As per the company, sectors such as water, urban transportation and power transmission are expected to see a smart revival. The company also expects investments from the government in industrial corridors and opportunities arising from revamping of smaller airports. Higher domestic orders are expected to improve the margin profile of capital good companies as international orders are won on stiff competition keeping margins under tight leash. L&T stock is presently trading up by 1.5%.
Besides Bajaj Auto, almost all auto stocks are trading on a positive note today. Gainers are being led by Mahindra & Mahindra (M&M) and TVS Motors. As per a leading business daily, M&M plans to set up Rs 3 bn tractor unit in Telangana, the newly formed state of India. The company management met the state's Chief Minister who assured them all the necessary support for the project. As per the state norms, the company has sought VAT and other concessions for the facility. The company will manufacture the Dhruv range of tractors in this new unit. The unit would be set up adjacent to the company's existing manufacturing unit in the State. M&M is trading higher by 6% today.