The engineering sector in India is the largest of the industrial sectors and can be broadly categorized into two parts, namely heavy engineering and light engineering.
It's advantage India when it comes to the engineering sector as India competes hand in hand across the globe. This is because the engineering sector in India is backed by notable government initiatives and huge investments.
The demand for new engineering projects and expected growth in contracts for engineering sector will keep the sector in favor in the years to come.
But do remember that engineering stocks are usually risker as their fortunes are prone to economic booms and busts and for this reason, they are often called cyclical stocks.
Generally considered an offensive tactic in investing, cyclical stocks can be used to generate high returns when the economy is doing well.
Therefore, the best time to buy such stocks is at the start of an economic expansion and the best time to sell them is just before the economy begins to slow down.
However, before selecting a stock, one must check whether the industry is due for revival or not.
To know more about the engineering sector's past and ongoing performance, have a look at the performance of the NIFTY Infrastructure Index and BSE Capital Goods Index.
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