Capital Goods Stocks Outlook
Select cos seen up on strong earnings
This story was originally published at 20:35 IST on 27 September 2024
Register to read our real-time news.Informist, Friday, Sep 27, 2024
MUMBAI – Shares of select capital goods companies are expected to gain next week on expectations of margin improvements and strong order pipelines. Analysts are bullish on these stocks as they expect them to have a re-run of robust earnings in the September quarter.
Companies like ABB India are expected to post strong improvement in their key earnings metrics again for Jul-Sep. An upside of 20-30% is likely for these stocks in the next one year if they report strong earnings for this quarter, Jay Shah, research associate at HDFC Securities, said.
Strong execution of orders and all-round steady business performance across verticals helped ABB India post robust earnings in Apr-Jun. But many other companies in the sector are likely to report flat to moderate sequential growth for the September quarter, Shah said.
Analysts are not very bullish on shares of Larsen & Toubro as the construction and engineering firm may report subdued growth in margins and a slowdown in order inflow in Jul-Sep. Siemens is also expected to post a de-growth in order bookings for the quarter.
Valuations for most capital goods stocks are quite stretched, which is a worrying factor for the sector. Despite this, analysts remain bullish on the sector for the medium to long term owing to significant ramping up of order books and improvement in margins expected in Oct-Mar, the second half of the financial year. Analysts suggest a 'buy-on-dips' approach for the sector, especially since the overall market is largely at stretched valuations.
TOP HEADLINES
* KEC International raises 8.7 bln rupees through QIP
* KEC Intl QIP closes today, issue price set at 955 rupees per share
* RITES consortium lowest bidder for 875.8-mln-rupee Delhi Metro order
* IPO Alert: Diffusion Engineers offer subscribed 7.16 times on Day 1
* Elgi Equipments' US arm to divest entire stake in JV for $154,586
* KEC Intl QIP opens today, floor price set at 976.64 rupees/share
* L&T wins mega orders in Saudi Arabia, UAE for power T&D business
* IPO Alert: Diffusion Engineers sets price band at 159-168 rupees/shr
* KEC Intl bags 10.03 bln rupees of new orders
* BHEL receives order from NTPC for thermal power project
* Samvardhana Motherson issues 259.9 mln shrs to QIBs at 190 rupees/shr
* Reliance Infra OKs raising 60 bln rupees via preferential issue, QIP
Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Bharat Heavy Electricals | 287.55 | 8.00 | 295.20 | 279.40 |
| CG Power and Industrial Solutions | 761.75 | 2.00 | 780.80 | 747.50 |
| Larsen & Toubro | 3705.65 | (-)2.30 | 3785.20 | 3611.20 |
| Siemens | 7295.20 | 6.80 | 7507.10 | 6929.10 |
| Thermax | 5200.70 | (-)2.70 | 5427.10 | 5038.10 |
| S&P BSE Capital Goods | 73704.11 | 0.50 | 74308.60 | 72669.10 |
| Nifty 50 | 26178.95 | 1.50 | 26328.50 | 26076.60 |
| S&P BSE Sensex | 85571.85 | 1.20 | 86178.60 | 85171.20 |
End
Reported by Alina Geogy
Edited by Saji George Titus
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2024. All rights reserved.
To read more please subscribe
Share this Story:
