- Date : 07/02/2023
- Read: 3 mins
Top 5 stocks in the imminent capex surge
Capex is the abbreviation for capital expenditure, i.e., the company's expenses on acquiring capital assets like plant and machinery, technology upgrades, etc.
Capex is an important parameter in judging a company’s performance potential. Higher capex means that the company is spending more on capital investments. This, in turn, can drive productivity, enhance revenue, reduce or eliminate downtime, upgrade processes, etc. All these improvements can work together to enhance the profitability of the company.
As the company becomes profitable, its share prices jump. So, for investors, increased capex can indicate a lucrative investment avenue.
Related - Read the 2023 forecast for capital markets
Recently, many companies have unveiled a jump in their capex. Here’s a pick of the top 5 companies whose scrip can ride the capex wave and deliver good returns –
1. PSP Projects
A leading name in the infrastructure industry, PSP Projects has recently established a manufacturing unit at the cost of Rs.1.1 billion. Its order book has recently seen multiple new additions spotlighting the company. For the financial year 2023, the company’s aggregate order book stands at Rs.19.5 billion, which is much larger than the last year’s revenue of Rs.17.5 billion.
The company’s scrip is currently trading at a 52-week high and has grown 16% over the last year.
2. HG Infra Engineering
The company is involved in highway and roadway construction. The company is poised to grow as the government has put impetus to road construction. It boasts important clients like Tata Projects, Adani Road Transport, and National Highways.
As of September 2022, the company’s order book stood at Rs.108.5 billion, including a price order worth Rs.4.1 billion from the Delhi Metro Rail Corporation.
Over the past year, the scrip has gained 19%, and the future also looks good.
3. Pitti Engineering
In the latest Union Budget 2023, railway capex received an unprecedented boost, and this is good news for Pitti Engineering as it supplies multiple products to Indian Railways. So, as Indian Railways' spending grows, Pitti Engineering’s order book can also grow.
Besides Indian Railways, Pitti Engineering provides customized products to clients like Siemens, General Electric, Cummins India, etc.
In FY2023, the company’s capex is estimated at Rs.1 billion. In the second quarter of the financial year, the order book stood at Rs.8.8 billion. The company’s shares have yielded 17% returns in the past year.
4. Apkotex Industries
A leading producer of synthetic latex and rubber, Apkotex announced a capex of Rs.2 billion in FY2023, the largest in its history. With an impetus on medical and industrial gloves, the company aims to expand its revenue. Over the past few years, the financial ratios and cash flows have remained stable.
Over the last year, the share price has declined, but with increased capex, the company is poised to grow.
5. RailTel Corporation of India
RailTel falls under the Ministry of Railways and is one of the largest telecom infrastructure providers. Since 2007, the company has been profitable and self-sustaining. It also boasts the highest net profit margin.
With an order book of Rs.45 billion as of September 2022, the shares have gained 8% over the past year.
So, take your pick from these stocks which might prove profitable for your portfolio.
Related - Find out why 2023 can be the best year for small and mid-cap stocks
Capex is the abbreviation for capital expenditure, i.e., the company's expenses on acquiring capital assets like plant and machinery, technology upgrades, etc.
Capex is an important parameter in judging a company’s performance potential. Higher capex means that the company is spending more on capital investments. This, in turn, can drive productivity, enhance revenue, reduce or eliminate downtime, upgrade processes, etc. All these improvements can work together to enhance the profitability of the company.
As the company becomes profitable, its share prices jump. So, for investors, increased capex can indicate a lucrative investment avenue.
Related - Read the 2023 forecast for capital markets
Recently, many companies have unveiled a jump in their capex. Here’s a pick of the top 5 companies whose scrip can ride the capex wave and deliver good returns –
1. PSP Projects
A leading name in the infrastructure industry, PSP Projects has recently established a manufacturing unit at the cost of Rs.1.1 billion. Its order book has recently seen multiple new additions spotlighting the company. For the financial year 2023, the company’s aggregate order book stands at Rs.19.5 billion, which is much larger than the last year’s revenue of Rs.17.5 billion.
The company’s scrip is currently trading at a 52-week high and has grown 16% over the last year.
2. HG Infra Engineering
The company is involved in highway and roadway construction. The company is poised to grow as the government has put impetus to road construction. It boasts important clients like Tata Projects, Adani Road Transport, and National Highways.
As of September 2022, the company’s order book stood at Rs.108.5 billion, including a price order worth Rs.4.1 billion from the Delhi Metro Rail Corporation.
Over the past year, the scrip has gained 19%, and the future also looks good.
3. Pitti Engineering
In the latest Union Budget 2023, railway capex received an unprecedented boost, and this is good news for Pitti Engineering as it supplies multiple products to Indian Railways. So, as Indian Railways' spending grows, Pitti Engineering’s order book can also grow.
Besides Indian Railways, Pitti Engineering provides customized products to clients like Siemens, General Electric, Cummins India, etc.
In FY2023, the company’s capex is estimated at Rs.1 billion. In the second quarter of the financial year, the order book stood at Rs.8.8 billion. The company’s shares have yielded 17% returns in the past year.
4. Apkotex Industries
A leading producer of synthetic latex and rubber, Apkotex announced a capex of Rs.2 billion in FY2023, the largest in its history. With an impetus on medical and industrial gloves, the company aims to expand its revenue. Over the past few years, the financial ratios and cash flows have remained stable.
Over the last year, the share price has declined, but with increased capex, the company is poised to grow.
5. RailTel Corporation of India
RailTel falls under the Ministry of Railways and is one of the largest telecom infrastructure providers. Since 2007, the company has been profitable and self-sustaining. It also boasts the highest net profit margin.
With an order book of Rs.45 billion as of September 2022, the shares have gained 8% over the past year.
So, take your pick from these stocks which might prove profitable for your portfolio.
Related - Find out why 2023 can be the best year for small and mid-cap stocks
