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The capital goods sector last saw good times in FY11 when orders from the power segment had peaked. Ever since, it has been a downhill slide for capital goods companies. A weak capex cycle meant fresh orders dried up and existing orders got delayed as clients put projects on hold. Expectations from a stable new government now run high. For the trailing four quarters, the sector on aggregate saw Q2 revenue growth flat over the previous year. Operating profit growth was similarly flat as were margins. Out of the top 20 capital goods companies by market capitalization only seven reported any positive sales growth. BHEL -the big daddy of the industry that grabs more than half of all BTG orders in the country was in for continued troubles. BHEL's profits fell 80 per cent (y-o-y) in Q2. Revenues declined 32 per cent. Operating margins fell from five per cent to 2.9 per cent. Outlook The rough patch for capital goods companies is likely to continue even if the economy