BHEL, 5 other capital goods stocks slide nearly 14% as India may ease curbs on Chinese bidders

Synopsis: India may ease curbs on Chinese firms bidding for government contracts, Reuters reported, pressuring capital goods stocks as markets weighed faster project execution against rising competition for domestic players like BHEL, L&T, ABB, Siemens, Suzlon, and Titagarh Rail

India had earlier placed strict rules that stopped Chinese companies from bidding for Indian government contracts. These contracts were worth around $700–750 billion. The rules were introduced in 2020, mainly for security reasons. Because of this, many Chinese firms were blocked, including a major Chinese company (CRRC) that was removed from a $216 million train project.

Now, Indian officials are planning to ease some of these restrictions. Many government departments have complained that projects are getting delayed and costs are rising because of shortages of equipment and suppliers. Due to the curbs, Chinese companies received 27% fewer new projects, dropping to $1.67 billion in 2021, according to a report.

These restrictions have also affected India’s power sector. India plans to increase its thermal power capacity to 307 gigawatts in the next 10 years, but limits on Chinese equipment have slowed progress. A government committee has suggested relaxing the rules to avoid further delays.

For Indian companies, easing the rules could offer benefits, as a wider supplier base may help projects move faster and lower costs, improving execution timelines and easing supply constraints across sectors.

However, the move also brings challenges, as Indian firms could face intense competition from Chinese players, particularly in infrastructure and manufacturing, potentially putting pressure on pricing and profit margins.

Additionally, according to some market experts have highlighted that capital goods stocks such as Siemens and ABB have been under pressure for some time due to weak earnings momentum rather than temporary factors like China imports. He stressed that the third and fourth quarters are crucial for the sector, as a lack of earnings pickup could pose challenges. However, companies like Larsen & Toubro have shown improvement, making upcoming quarterly results critical for assessing medium- to long-term prospects.

Here are a few stocks that will be affected by this policy change

Bharat Heavy Electricals Limited

With a market capitalization of Rs. 96,453.15 crores, the share of Bharat Heavy Electricals Limited has reached an intraday low of Rs. 261.40 per equity share, down nearly 13.94 percent from its previous day’s close price of Rs. 303.70. Since then, the stock has retreated and closed at Rs. 277 per equity share. 

BHEL is an Indian government company. It makes big machines used in power plants, factories, and railways. BHEL helps produce electricity using coal, water, wind, and solar energy. It also provides services like installation and maintenance of heavy electrical equipment across India and other countries.

Larsen & Toubro Limited

With a market capitalization of Rs. 5,56,628.80 crores, the share of Larsen & Toubro Limited has reached an intraday low of Rs. 3,990.50 per equity share, down nearly 4.25 percent from its previous day’s close price of Rs. 4,167.80. Since then, the stock has retreated and closed at Rs. 4,046.50 per equity share. 

Larsen & Toubro is a large Indian engineering and construction company. It builds roads, bridges, buildings, metros, and power plants. L&T also works in defense, IT services, and heavy engineering. It plays a big role in developing India’s infrastructure and industrial projects.

ABB India Limited

With a market capitalization of Rs. 1,06,801.82 crores, the share of ABB India Limited has reached an intraday low of Rs. 4,981 per equity share, down nearly 6 percent from its previous day’s close price of Rs. 5,298.80. Since then, the stock has retreated and closed at Rs. 5,040 per equity share. 

ABB India provides technology for electricity and automation. It helps factories and industries use power safely and efficiently. ABB makes products like motors, transformers, and robots. The company supports industries such as manufacturing, transportation, and renewable energy to improve productivity and save energy.

Siemens Limited

With a market capitalization of Rs. 1,06,941.21 crores, the share of Siemens Limited has reached an intraday low of Rs. 2,992 per equity share, down nearly 4.54 percent from its previous day’s close price of Rs. 3,134.30. Since then, the stock has retreated and closed at Rs. 3,002.95 per equity share. 

Siemens Limited works in areas like power, transportation, healthcare, and industry. It makes electrical equipment, trains, medical machines, and automation systems. Siemens helps companies work faster and smarter using technology. It also supports clean energy and digital solutions in India.

Suzlon Energy Limited

With a market capitalization of Rs. 69,836.65 crores, the share of Suzlon Energy Limited has reached an intraday low of Rs. 50.69 per equity share, down nearly 4.20 percent from its previous day’s close price of Rs. 52.91. Since then, the stock has retreated and closed at Rs. 50.93 per equity share. 

Suzlon Energy is a renewable energy company from India. It mainly makes wind turbines that generate electricity from wind. Suzlon helps reduce pollution by promoting clean energy. The company installs and maintains wind power projects in India and other countries.

Titagarh Rail Systems Limited

With a market capitalization of Rs. 11,111.93 crores, the share of Titagarh Rail Systems Limited has reached an intraday low of Rs. 820 per equity share, down nearly 4.14 percent from its previous day’s close price of Rs. 855.40. Since then, the stock has retreated and closed at Rs. 825.10 per equity share. 

Titagarh Rail Systems manufactures railway wagons, coaches, and metro trains. It supports Indian Railways and metro projects. Titagarh helps improve public transport and freight movement with modern and safe rail systems.

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