Capital Goods Stocks Outlook
Stock-specific reaction likely amid earnings
This story was originally published at 19:59 IST on 18 April 2025
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MUMBAI – Capital goods companies are expected to see a stock-specific reaction next week as the March quarter earnings season gets into full swing. Among major companies in the sector, Supreme Industries and Elecon Engineering are set to report quarterly earnings on Thursday.
The sales growth of Supreme Industries in the March quarter is expected to be muted due to tepid demand, analysts said. According to the average of estimates by eight brokerages, the company's consolidated sales are likely to rise a mere 3% on year to INR 31 billion, while net profit is seen declining 29% to INR 2.53 billion. "Softening of raw material prices may lead to inventory loss and lower operating margin (for Supreme Industries)," IDBI Capital Markets & Securities said in a report.
Overall, the capital goods companies in the Nifty 200 index are expected to see a mixed quarter. While the net profit of Larsen and Toubro, ABB India, and Bharat Heavy Electricals is likely to see an 8-30% increase in the March quarter, Siemens, Cummins India, and Supreme Industries are likely to see a 9-29% on year decline. A similar trend is likely in defence-related companies, with Bharat Dynamics and Solar Industries expected to report a growth in profits of 18% and 46%, respectively, while Hindustan Aeronautics may report a 41% decline.
Analysts are positive on the sector as they expect a significant pickup in capital expenditure by the government this year after the disappointment in the previous financial year. "We continue to remain structurally positive on the sector from a near-to-medium term perspective on the back of recovery in the capex cycle and healthy order inflows, with the potential for adverse impact on working capital being the key monitorable," Nirmal Bang Institutional Equities said in a report earlier this week.
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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:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Bharat Heavy Electricals | 227.39 | 6.80 | 232.00 | 222.20 |
| CG Power and Industrial Solutions | 619.85 | 8.30 | 639.80 | 586.20 |
| Larsen & Toubro | 3247.30 | 4.20 | 3307.40 | 3132.40 |
| Siemens | 2810.00 | 3.00 | 2890.00 | 2730.00 |
| Thermax | 3394.40 | 10.00 | 3473.90 | 3271.70 |
| Bharat Electronics | 295.15 | 3.60 | 299.80 | 288.90 |
| S&P BSE Capital Goods | 61111.69 | 4.40 | 61997.70 | 59577.60 |
| Nifty 50 | 23851.65 | 4.50 | 24248.00 | 23100.40 |
| S&P BSE Sensex | 78553.20 | 4.50 | 79896.20 | 75994.20 |
End
Reported by Anshul Choudhary
Edited by Saji George Titus
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