Most defensive growth is expected from STE, which is projected to deliver approximately 15% growth.

Several large-cap capital goods companies, except YZJSB, is expected to achieve double-digit YoY earnings growth in FY25F.

In its report, CGS International (CGSI) said the most defensive growth is expected from STE, which is projected to deliver approximately 15% growth, driven by the execution of defense and urban solutions projects.

Additionally, it said the market has underestimated SCI's core earnings growth, which could potentially reach around 10% due to annual contributions of S$50-60 million from Senoko Power.

It anticipates the largest earnings growth from STM, with a projected increase of 50%, as revenue rises by 26% in FY25F.

Amng the capital goods companies under its coverage, CGSI said Keppel Corporation (KEP) will need to accelerate its efforts in FY25F to meet its cumulative asset monetisation target of $10b to12b by 2026F.

For STM, the resolution of ongoing investigations by the Monetary Authority of Singapore (MAS) and Commercial Affairs Department (CAD) is a critical re-rating catalyst.

CGSI said additional drivers include the delivery of legacy projects and achieving the target FY25F EBITDA margin of 8%.