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Informist, Friday, Oct. 11, 2024

MUMBAI – Shares of capital goods companies are likely to be down next week due to weak sentiments in the overall domestic market, where investors are selling highly valued stocks. The construction major Larsen & Tourbo's September quarter earnings will be in focus next week, which will help investors assess the demand environment of the sector. Further, the quarterly earnings are likely to continue to lead to stock-specific actions with companies such as Kalpataru Projects International, Titagarh Rail Systems, and Kirloskar Brothers scheduled to come out with their Jul-Sept results next week.

Sluggish execution of domestic contracts, flat-to-declining operating margin, and a fall in order inflow are likely to have affected engineering behemoth Larsen & Toubro in the quarter ended September, as compared to the same quarter a year ago. The declining trajectory of revenue growth for five consecutive quarters till the June quarter is expected to have continued in Jul-Sept, albeit with a relatively smaller decline. The company will report its quarterly earnings Wednesday.

Larsen & Toubro will likely report a consolidated net profit of INR 32.62 billion in the September quarter, up 1.2% on year and 17% sequentially, according to an average of estimates from nine brokers. The estimates for net profit range from a low of INR 27.90 billion to a high of INR 35.90 billion. The net profit growth estimate is considerably lower than the 38% jump recorded by the company in the year-ago quarter.

CG Power and Industrial Solutions reported its earnings Monday, with its power systems segment posting strong growth while its industrial systems segment was weak due to sluggish demand for motors. Overall, the company's profit for the quarter was INR 2.21 billion, down 9% on year, despite reporting the highest revenue growth in the last six quarters. The revenue rose 21% on year to INR 24.13 bln, but profitability suffered due to higher cost of materials.

Shares of capital goods companies dived this week with several stocks seeing sharp corrections. Shares of NBCC India, Bharat Heavy Electrical, ABB India, and Siemens fell 18-13% this week. The BSE Capital Goods index was down 7.5% this week. 

TOP HEADLINES

* Thermax to acquire 100% stake in Buildtech Products for INR 720 mln

* L&T wins 'significant' order to deploy advance welding technology
* Kalpataru Projects' board to meet Mon to mull raising funds via QIP
* NCLT admits Bank of India's insolvency plea against RInfra arm GF Toll Road
* KEC International bags orders worth INR 11.42 bln across three verticals
* NMDC ties up with RITES for rail connectivity works at its mines
* Schaeffler India Jul-Sept PAT rises 5.2% YoY to INR 2.47 billion
* RITES' railway private freight terminal order converted to turnkey basis
* Reliance Infra arm to build integrated project for ammunition in Maharashtra
* Earnings Outlook: Siemens seen posting 32% on-year growth in PAT Jul-Sept
* Earnings Outlook: L&T revenue, order inflow growth seen slowing; margins dn
* RITES bags INR 535-mln order from Andhra Pradesh Power Generation Corp
* Analyst Concall: Polycab India sees govt, pvt spends boosting demand
* Elecon Engg Jul-Sept consol PAT falls 1% YoY to INR 877.2 million

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:

End

Reported by Anshul Choudhary

Edited by Tanima Banerjee

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