Capital Goods Stocks Outlook
Seen tad up on strong demand for pdts
This story was originally published at 20:18 IST on 20 September 2024
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MUMBAI - Capital goods stocks are seen higher next week as demand for their products remains strong. Further, analysts expect margins for these companies to remain high amid benign raw material prices.
"The order book of some of these companies is very strong, and it will continue to drive growth even if we see some slowdown in orders as the government is changing its focus to populist measures," an analyst with a foreign brokerage, who covers the sector, said.
The analyst said stocks relating to the transmission and distribution business are seen higher as spending in this space is healthy. Apart from traditional sectors, new segments are emerging, which include data centres and semiconductor facilities, the analyst said.
Expensive valuations of capital goods stocks remains a concern and may limit the upside. Recently, high valuations have affected returns in this segment with the BSE Capital Goods index up 1.2% in the past three months, underperforming the Sensex, which has gained over 9% during the same period.
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Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Bharat Heavy Electricals | 266.15 | 0.70 | 272.60 | 254.70 |
| CG Power and Industrial Solutions | 746.50 | 4.60 | 767.40 | 715.60 |
| Larsen & Toubro | 3793.90 | 5.00 | 3891.00 | 3631.70 |
| Siemens | 6832.75 | 1.80 | 6951.60 | 6652.90 |
| Thermax | 5345.55 | 13.00 | 5863.90 | 4768.00 |
| S&P BSE Capital Goods | 73373.89 | 1.00 | 74662.20 | 71103.40 |
| Nifty 50 | 25790.95 | 1.70 | 26111.60 | 25266.30 |
| S&P BSE Sensex | 84544.31 | 2.00 | 85649.00 | 82635.30 |
End
Reported by Anshul Choudhary
Edited by Rajeev Pai
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