Beneficiaries of possible lower interest rates? 5 construction & contracting companies with upside potential of up to 32%
Synopsis
Whether it is an individual or a company, interest rates matter to every segment of the economy, the only difference is how strong is this co-relationship. For an individual, his or her EMI, right from home loans to personal loan to auto loan is decided by interest rates. For companies the cost of capital is decided by interest rates and capital is the lifeline for all companies. When it comes to companies, there are certain sectors which get impacted by movement in interest rates more than others. The reason is that both the demand for their product and service and their own ability to grow and have better margins has strong co-relationship with interest rates. Now with higher probability of interest rate coming down, will companies from contracting and construction space which work on wafer thin margins have better margins? If Yes, then order books which in any case are brimming may deliver more than expected.
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