“The key silver lining for the first quarter results are very strong inflows. This was across the board for short cycle as well as long cycle orders, and that reflects the underlying resilience in demand and the confidence which companies and managements are expressing in terms of growth coming back, comes from this side,” Baid said.
Baid noted that the margin hit in quarter one was expected, with cost pressures being worked through. As new orders, priced more recently and presumably at better terms, start moving into execution over the next couple of quarters, margins could recover.
What stood out in the first quarter was the mix: both short-cycle and long-cycle orders came through, with demand spread across power, grid equipment, data centers, and oil and gas. She reads that spread as a sign of underlying strength in the capex cycle, which could play out over the next 18 to 24 months.
Baid believes not everything is priced in. She pointed to a handful of names that still offer room to run, partly because some of them corrected alongside the broader earnings weakness.
CG Power, which has slipped below the ₹900 mark, made her list on the strength of its power segment and what she sees as an industrial business that’s bottoming out.
MTAR Technologies was another name she flagged, citing a large US customer buying fuel-cell-based cogeneration solutions for data centers. The stock has cooled off considerably from its highs — it touched almost ₹10,000 at one point and was trading around ₹7,044 during the conversation — but Baid pointed to the company’s on-track capacity expansion and the resulting jump in execution volumes as reasons to stay constructive.
On the largecap side, Larsen and Toubro (L&T) made the cut too, backed by its order backlog and an improving working-capital position. Baid was careful to temper expectations here, though — she doesn’t see the stock outperforming immediately and expects the real pickup in execution to show up only in the second half of the year.The fourth name on her list was Aditya Infotech, which sells under the CP Plus brand and has built a strong position in India’s IP camera market. Baid credited the company with localising much of the camera value chain and said it now has an 18-24 month head start over domestic rivals — one it’s using to push into premium products aimed at enterprise and government buyers.
The stock has cooled a bit since results, largely on near-term caution around the electronics supply chain, but Baid’s earnings estimates for the company sit above the street’s.
In her words, she believes the “company should be able to deliver 40-45% revenue CAGR” with margins holding around the 14.5-15% mark, translating into 45-50% earnings growth over the next two years — helped along by the exit of Chinese players from the market after new government certification requirements kicked in.
Baid didn’t go too deep into defence names, noting that coverage sits with a colleague at IIFL. But she did confirm that Bharat Electronics remains the firm’s preferred pick in the space, pointing to the lead that larger system integrators have built up in order books and deliveries.
For full interview, watch accompanying video
