Further, with oil prices reviving to pre-Covid levels, execution should pick up in West Asia and allied regions. If oil prices move to $45-50, global order flows will improve, says Umesh Raut of YES Securities.
Beyond that, the near term looks bumpy. For one, private capex remains a pain point in India, and is likely to remain delayed. Further the Centre and state governments, which are grappling with their own problems, cannot drive order inflows alone. The Centre is staring at a tight fiscal situation. Though it remains committed to spending for pushing the economy, it will help order inflows only in some segments, say analysts. Order flows from state governments are also expected to be subdued. Analysts, thus, say firms will target orders with funding burden spread across Central/state governments and multi-lateral agencies.
Orders for Metro rail construction are likely to continue. Public sector entities like Hindustan Petroleum, Indian Oil, Bharat Petroleum, NTPC, and Coal India are expected to continue with expansion.
Waterways, water transportation, irrigation, power transmission and distribution (T&D), roads and highways, and hydrocarbons are segments that can expect good order flows. L&T is, therefore, targeting projects like coastal roads and metro construction, where involvement of multi-lateral agencies means payment collection will not be a problem.
Overall, analysts like Raut expect firms such as Kalpataru Power and KEC International to benefit from power T&D and water distribution and irrigation orders, respectively, along with L&T. Railways, green energy corridors, hydrocarbons and large highway orders may also help L&T, along with defence orders. ABB and Siemens, too, stand to be early beneficiaries of an economic recovery and increasing automation.
Order activity in roads, urban infra, railways, water distribution, irrigation sub-segments, and most importantly health care are expected to pick up in H2FY21, feels Saiyed.
L&T, KNR Constructions, Dilip Buildcon, PNC Infratech, KEC, and HG Infra are seeing speedy recovery thanks to labour being mobilised to near-normal levels, say analysts at HDFC Securities.