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Informist, Friday, Dec. 3, 2024

MUMBAI – Shares of capital goods companies are likely to move in a range next week ahead of the December quarter earnings. Market participants are waiting for the earnings to know if order inflows from the government have picked up and whether execution by companies is still at healthy levels.

There is a worry that the government will miss its budgeted capital expenditure target for this financial year. In a report earlier this week, Emkay Global Financial Services said capital expenditure remained sluggish in November with the spending at INR 470 billion, down 9% from October. "The capex slowdown is broad-based among other major sectors: Roads, Defense, and Railways have all disappointed so far," the brokerage said.

Within the capital goods sector, Oct-Dec earnings of transmission and distribution companies are expected to be robust, especially that Larsen & Toubro, Hitachi Energy India, and KEC International, as they received huge orders, an analyst with a foreign brokerage said. He expects Larsen & Toubro to report orders worth over INR 920 billion for the December quarter.

However, Siemens and ABB India may report weak growth in orders for the December quarter and that will likely drag the overall performance of the capital goods sector, the analyst said. In the case of generator set-making companies, the analyst said those in the low-horsepower segment may continue to see weakness, while those in the medium-horsepower segment may stabilise.

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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

With inputs from Aman Aryan

Edited by Ashish Shirke

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