Bubble, there are very few instances of order cancellations since a lot of capital costs have already been incurred, as part of Engineeering inputs, by the clients. with reagrds of ramping up of capacity, well upgrading of capacities in most of these units is already initiated , but upgarding of such a unit itself is a 2~3 years project,which is why most of these units have already declared that they are fully booked and cannot accept any more orders.
On the point raised by Basantji, that I would beg to differ on the issue that no change is happening on the capital goods sector. Leave aside the order books by themselves, just see what it is doing to the margins of these company. Unlike say someting like RCom, which is dropping rates to gain volumes, these companies are now able to gain both in terms of margins and volumes. The additional capital available to these companies has enabled them to enter into niche areas of manufacturing and international cleints are now looking up to these companies with much more respect and hence orders.
Also note that growth in any sector, be it sugar,manufacturing, capital goods , refining and petrochem cannot take place without massive additions in power production and all these industires must therefore converge on the power sector for support.
The type of power may vary depending on the usage ,size and capital.But irrespective of whether the first source of energy to run the turbine comes from gas ,coal, wind or neuclear for operating the mother turbines, downstream sections would be requiring more or less similar units.
In short, if the overall GDP growth is to be maintained anywhere @ the 8~9% plus mark, this industry should show great CAGRs in the comming years and would be multibaggers.... just a personal opinion....
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