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Informist, Friday, Feb. 14, 2025

MUMBAI – Shares of capital goods companies are likely to see some selling pressure going ahead as muted growth in the government's capital expenditure in the next financial year is expected to hurt earnings growth. Capital goods as a sector is not very "attractive" any more after Finance Minister Nirmala Sitharaman announced only a 10% increase in the Budget estimate for capital spending in 2025-26 (Apr-Mar) compared to the revised estimate of the current financial year, an analyst at a top domestic brokerage said.

Given the lower-than-expected growth in government spending going forward, stocks might see some correction till companies detail their March quarter results, the analyst said. The performance of stocks will now depend on order intakes of companies, he added. 

Despite going through corrections, a few stocks such as ABB India still remain over-valued, the analyst said. Stocks such as Kalpataru Projects International and KEC International are now at decent valuations and valuation of Cummins India looks attractive, he added. On Friday, Kalpataru Projects was one the worst hit among Nifty 500 stocks, closing 10.5% lower at INR 879.55 on the National Stock Exchange. 

BSE Capital Goods index Friday closed at 57349.10 points, 2.8% lower than Thursday. The index lost 6% this week and over 15% this year. All the index constituents fell this week, with Kalpataru Projects, Grindwell Norton, Praj Industries, Elgi Equipments, Schaeffler India, NBCC (India), CG Power and Industrial Solutions down 15-10%.

Defence stocks are likely to fall sharply going forward due to their high valuations and risk of softer earnings growth, another analyst with a mid-size brokerage said. This is not a steady sector and the rally it has seen is not a sustainable one, he added.

TOP HEADLINES

* GAIL, Cummins India to collaborate on sustainable, green energy

* RITES signs INR 1.20-bln MoU with Neyveli Uttar Pradesh Power

* Titagarh Rail Oct-Dec consol PAT falls 16.1% on year, sales down 5.5%

* Carborundum Oct-Dec consol profit falls nearly 69% YoY to INR 347.8 million

* Kalpataru Projects Oct-Dec net profit rises over 9% YoY to INR 1.57 billion

* KNR Constructions Oct-Dec PAT rises over twofold YoY to INR 1.82 billion

* Gujarat Pipavav Oct-Dec net profit falls 14.8% on year, sales down 2.5%

* SKF India Oct-Dec PAT falls 17% YoY to INR 1.1 billion

* RITES inks MoU on information technology solutions for consultancy works

* IPO Alert: Ajax Engineering offer closes with 6.45 times subscription

* Godrej Ind Oct-Dec consol PAT rises 77% on year to INR 1.88 billion

* Kirloskar Brothers Oct-Dec profit rises nearly 28% YoY to INR 582 million

* Earnings Review: Siemens financials hit by slowdown in private capex

* Titagarh Rail bags order of INR 5.37 billion from Ambuja Cements, ACC

* Suzlon Group wins repeat order from Oyster Renewable for Madhya Pradesh

* BHEL gets letter of intent for INR 62-bln order from Damodar Valley Corp

* EID Parry Oct-Dec consol PAT rises nearly 65% YoY to INR 1.95 billion

* BEML inks pact with South Korea-based company to build, sell defence engines

* IRCON Intl Oct-Dec net profit falls 24% YoY, sales down over 11%

* Kirloskar Oil Oct-Dec consol PAT falls 20.6% YoY to INR 713 million

* IPO Alert: Ajax Engineering offer subscribed 28% on the first day

* Rail Vikas emerges as lowest bidder for railway order worth INR 3.55 bln

* Elgi Equipments Oct-Dec consol PAT falls 3.9% YoY to INR 805.82 million

* Varroc Engg posts consol loss of INR 474.3 mln for Oct-Dec vs PAT year ago

* Engineers India Oct-Dec revenue falls 12.4% on year, PAT rises 75.4%

* IPO Alert: Advanced Sys-Tek files DRHP for INR 1.15 bln fresh issue, OFS

* BHEL, Hitachi Energy consortium gets order from Rajasthan Part I Power

* IRCON Intl gets order of INR 1.94 bln from railways to set up 665 towers

* BHEL gets contract of INR 80 bln from Mahagenco for 2 power station units

* IPO Alert: Ajax Engineering raises INR 3.79 billion from anchor investors

* Inox India Oct-Dec consol PAT rises 20.2% YoY to INR 583.86 million

* IRCON Intl JV secures road project contract worth INR 5.32 bln in Manipur

* Action Construction Oct-Dec consol PAT rises 26.5% YoY to INR 1.12 billion

* AIA Engg Oct-Dec consol PAT falls 7.3% on yr to INR 2.6 bln, sales down 8.8%

* Analyst Concall: Generator ops pricing to take time to settle -Cummins India

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 Aman Aryan

Edited by Ashish Shirke

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