Capital Goods Stocks Fall on China Bid Fears; Brokerages Allay Concerns

• Capital goods stocks, including BHEL and Hitachi Energy, fell for a third day due to reports of China companies potentially bidding for government contracts.
• Shares of Cummins India, BHEL, Hitachi Energy, and Transformers and Rectifiers (India) Ltd dropped up to 5% on January 12.
• Brokerages like Systematix and PL Capital believe fears are overblown, citing localization push, existing order books, and strategic importance of power grids.
• A partial recovery was observed after US Ambassador to India Sergio Gor's comments, but Hitachi Energy India still hit a one-month low.
• The government's potential rollback of 2020 procurement restrictions aims to revive competition and speed up project execution.

Why It Matters: Indian capital goods stocks dipped on fears of Chinese competition, but analysts suggest the impact will be limited.