Engineering Stocks

In India, the engineering industry is the biggest industrial sector. It is representative of 63% of all international collaborations and 27% of all industrial sector factories. India enjoys a competitive edge in a number of engineering subsectors when it comes to manufacturing costs, market knowledge, technology, and innovation.

Over the last few years, India’s engineering sector has experienced exceptional growth on the back of increased investment in infrastructure and industrial production.

Capacity expansion in industries such as infrastructure, electricity, mining, oil and gas, refineries, steel, autos, and consumer durables is driving demand for services in the engineering sector. Indian Electrical equipment is the largest sub-sector, followed by Plant equipment & Earth moving/ mining machinery.

The electrical equipment market share in India is likely to increase by US$ 33.74 billion from 2021 to 2025, and the market’s growth momentum is expected to accelerate at a CAGR of 9%. Investment in the engineering R&D sector is anticipated to reach US$ 63 billion by 2025.

Investing in the engineering sector can be a lucrative but complex endeavour. Here are several key factors to consider before investing in engineering sector stocks:

• Industry Overview: Understand the overall state of the engineering industry. Consider factors like technological advancements, demand for engineering services, and market trends.
• Economic Conditions: Evaluate the broader economic conditions. Economic downturns can impact infrastructure spending, affecting engineering companies.
• Company Fundamentals: Analyse the financial health of the engineering companies you’re interested in. Look at revenue growth, profit margins, and debt levels. Check if the company has a consistent track record of earnings.
• Market Position: Assess the market position of the engineering companies. Look for companies with a strong market presence, competitive advantage, and a diversified client base.
• Regulatory Environment: Understand the regulatory environment that engineering companies operate in. Changes in regulations can have a significant impact on their operations and profitability.
• Global Exposure: Consider the global exposure of the companies. Some engineering firms may have international operations, and geopolitical factors can affect their performance.
• Project Backlog: Look at the company’s project backlog. A healthy backlog indicates a steady stream of work, but an excessive backlog may raise concerns about execution capabilities.
• Cash Flow and Dividends: Examine the company’s cash flow situation. Positive cash flow is essential for ongoing operations and potential expansion. Additionally, consider if the company pays dividends and its dividend history.

To invest in sector stocks via Angel One, follow these steps:

• Log in to your Angel One account.
• Click on the search icon and look for your desired engineering sector stock.
• Now, place your buy order. Simply click on the ‘Buy’ button, enter your desired quantity, and select the order type.
• To complete your transaction, click on the ‘Buy’ button.

You can track the status of the purchase from the ‘Positions’ section in the ‘Orders’ module. Once the stock is delivered, you can track its gains and losses from your ‘Portfolio.’