Capital Goods Stocks Outlook
Earnings positive but valuations may cap upside
This story was originally published at 20:55 IST on 31 October 2024
Register to read our real-time news.Informist, Thursday, Oct. 31, 2024
MUMBAI – Analysts are largely positive on the quarterly performance of capital goods companies, which have shown strong execution during Jul-Sept. However, stock performance is likely to be muted next week considering the high valuation of several companies in the sector amid weak sentiments in the overall market.
The construction major Larsen & Toubro reported its quarterly earnings Wednesday. Its consolidated net profit rose 5.4% on year to INR 33.95 billion, beating analysts' expectations. Further, the company maintained its guidance for order inflow growth of 10%, revenue growth of 15%, and margin of 8.25% for 2024-25 (Apr-Mar). Post this announcement, shares of the company rose sharply Thursday, ending the session over 6% higher at INR 3,622.30.
"Further support for execution growth and margins will come from improved execution in the coming quarters. Though a large part of inflows during the quarter were driven by international projects, it has hedged the company very well against weaker domestic inflows," Motilal Oswal Financial Services said in a report post Larsen & Toubro's earnings. The brokerage raised the company's target price marginally to INR 4,300, while maintaining its "buy" rating for the stock.
Among others, Bharat Heavy Electricals reported a net profit of INR 966.70 million compared with a net loss of 2.13 billion during the same period last year. Nuvama said the results were above expectations on the back of strong executions. The brokerage was bullish on the company on expectations of large orders in the coming quarters. "...another 25–35 GW ordering (is) likely over FY25E–27E, including 7–8 GW of ongoing tenders from NTPC, implying BHEL may close FY25 with another 4–5 GW at least," the brokerage said. It has a 'buy' rating on the stock with a target price of INR 425.
The National Stock Exchange and BSE will hold a Muhurat trading session Friday. The pre-open session will start at 1745 IST and the special live trading session will begin at 1800 IST and end at 1900 IST.
TOP HEADLINES
* Analyst Concall: L&T sees capex prospects lower at pro-subsidy state level
* L&T retains guidance for order inflow, revenue growth, 8.25% margin for FY25
* Earnings Review: L&T consol PAT, revenue above Street estimate; profit muted
* Analyst Concall: Voltas expects Voltbek to reach EBITDA break-even by FY25
* Carborundum Jul-Sept consol PAT rises 13.7% YoY to INR 1.16 billion
* AIA Engg Jul-Sept consol net profit falls 20.5% YoY, sales fall 19.4%
* L&T wins 'major' orders for electricity grids in West Asia, Africa
* Siemens receives INR 1.4 bln income tax demand for assessment year 2021-22
* Earnings Review: Voltas Jul-Sept net hits 17-qtr high of INR 1.34 billion
* Engineers India Jul-Sept PAT falls 22.6% on year, sales down 13%
* V-Guard Jul-Sept net profit rises marginally on year to INR 521.9 million
* Kirloskar Brothers' Jul-Sept PAT rises 79.5% on yr to INR 630 million
* NCLT asks Siemens to hold shareholder meet to OK energy unit demerger
* Earnings Review: Suzlon Energy consol PAT up 95.7% YoY, but misses estimates
* Analyst Concall: Suzlon Energy aims to install 5 GW capacity in FY25
* Kalpataru Projects Jul-Sept net profit rises 17.2% YoY to INR 1.32 billion
* Earnings Review: BHEL surprises Street with INR 967 mln PAT in Jul-Sept
* Maharashtra Seamless Jul-Sept consol PAT falls 12.1% YoY, sales down 15.9%
* RITES gets letter of acceptance for INR 591-mln project in Uttar Pradesh
* Rail Vikas Nigam lowest bidder for INR 1.87-bln East Central Railway project
* Thermax to acquire 100% stake in Buildtech Products for INR 720 mln
* Praj Industries Jul-Sept consol PAT falls 13.7% YoY, sales down 7.5%
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 | 239.00 | 10.20 | 245.50 | 229.60 |
| CG Power and Industrial Solutions | 704.40 | (-)5.30 | 729.70 | 688.90 |
| Larsen & Toubro | 3622.30 | 8.90 | 3741.80 | 3448.60 |
| Siemens | 6976.30 | 3.00 | 7063.00 | 6866.70 |
| Thermax | 4925.45 | (-)9.30 | 5183.70 | 4772.90 |
| BHARAT ELECTRONICS LTD | 284.90 | 4.60 | 290.40 | 281.00 |
| S&P BSE Capital Goods | 69105.80 | 4.00 | 69945.60 | 67954.80 |
| Nifty 50 | 24205.35 | 0.10 | 24450.00 | 24050.30 |
| S&P BSE Sensex | 79389.06 | (-)0.00 | 80331.00 | 78817.00 |
End
Reported by Anshul Choudhary
Edited by Tanima Banerjee
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:
