Capital Goods Stocks Outlook
Seen in range next week; HAL earnings eyed
This story was originally published at 21:59 IST on 8 November 2024
Register to read our real-time news.Informist, Friday, Nov. 8, 2024
MUMBAI – Shares of capital goods companies are seen in a range next week, as although the Jul-Sept quarter earnings have shown strong execution, expensive valuations of several companies in the sector are likely to affect stock performance. Earnings will remain in focus with defence major Hindustan Aeronautics set to report its Jul-Sept earnings on Thursday.
HAL is expected to post healthy growth in key parameters in Jul-Sept due to order book in manufacturing and steady growth in repair and overhaul, and spares business, analysts said. The company is expected to report a 12% year-on-year rise in its Jul-Sept net profit to INR 13.9 billion, according to an average of estimates from six brokerage houses. The revenue is seen rising 9% on year to INR 61.2 billion.
Analysts are positive about capital goods companies in terms of earnings in the coming quarters as government spending is expected to pick up in Oct-Dec, resulting in orders for these companies. On Friday, Hindustan Aeronautics said it got a contract from the Ministry of Defence for upgrading the avionics of Dornier-228 Transport Aircraft.
Earlier this week, industry major ABB India reported a 21% on year increase in net profit to INR 4.40 billion in Jul-Sep, but missed the analysts' expectations of INR 4.81 billion. Its revenue rose a mere 5% on year to INR 29.12 billion--marking the company's slowest growth in revenue in 14 quarters.
Brokerages were concerned over ABB India's slower execution during the quarter as the share of long cycle orders increased and as overall order inflows slowed. This has led to brokerages baking in slower execution in the coming quarters. "ABB expects the execution of base orders (75% of backlog) within 3-12 months, while long-cycle order execution is yet to gain momentum and would require more than 12 months as it follows a project milestone-based trajectory," Nomura said in post earnings review note of the company. Post earnings, the brokerage cut ABB India's target price to INR 7,570 from INR 8,260, while maintaining its "neutral" rating.
TOP HEADLINES
* Analyst Concall: Cummins India expects double-digit revenue growth in FY25
* Inox India to supply 5 cryogenic tanks of 690 kl to UK-based Highview Power
* Earnings Review: Cummins India net up 37% YoY on rising sales, price hikes
* Analyst Concall: Astral expects volumes, financials to normalise by Mar-end
* RHI Magnesita Jul-Sept net profit falls 23.2% YoY, sales fall 8%
* IRCON Intl Jul-Sept PAT falls 12.2% YoY as sales down 20.3%
* Earnings Review: Flat top line drags Astral Jul-Sept consol net down 16%
* Polycab India gets INR 15.50-bln order for Bihar network from BSNL
* RITES Jul-Sept net profit falls over 26% YoY as sales drop over 7%
* Polycab India lowest bidder for INR 41-bln order from BSNL
* Timken India Jul-Sept net profit falls 3.3% on year to INR 899.48 mln
* RITES gets letter of acceptance for INR-363-mln project from Delhi Metro
* Rail Vikas JV emerges lowest bidder for INR 8.38 bln Eastern Railway project
* Analyst Concall: ABB India says focused on execution of order backlog
* L&T signs agreement to buy up to 21% stake in E2E Networks
* KEC Intl Jul-Sept consol PAT rises 53% YoY to INR 854.1 million
* Earnings Review: ABB India Jul-Sept PAT up 21% on year, misses Street view
* Rail Vikas lowest bidder for INR 6.25-bln South Central Railway project
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 | 239.04 | (-)1.20 | 248.70 | 232.50 |
| CG Power and Industrial Solutions | 716.25 | (-)0.60 | 739.50 | 699.30 |
| Larsen & Toubro | 3660.30 | 0.90 | 3695.70 | 3603.00 |
| Siemens | 7174.35 | 3.20 | 7355.00 | 6919.20 |
| Thermax | 5131.00 | 2.70 | 5248.80 | 5008.20 |
| BHARAT ELECTRONICS LTD | 297.75 | 3.20 | 308.10 | 290.60 |
| S&P BSE Capital Goods | 69479.43 | (-)0.10 | 70753.00 | 68668.80 |
| Nifty 50 | 24148.20 | (-)0.60 | 24373.20 | 23954.20 |
| S&P BSE Sensex | 79486.32 | (-)0.30 | 80160.20 | 78780.40 |
End
Reported by Anshul Choudhary
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:
