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Informist, Friday, Jun. 6, 2025

NEW DELHI – Stocks of capital goods companies are expected to retain their gains and some may see further momentum next week as analysts are positive on the sector. This comes on the back of structural tailwinds for the sector, including expectations of a pick-up in capital expenditure and rising demand for exports.

Analysts also hold a positive view for the sector in the near to medium term with the recently concluded earnings season pointing towards further growth. The BSE Capital Goods Index is down 7.2% from its lifetime high of 76,271.56 touched on Jul. 9. Nuvama Institutional Equities is selectively positive on public expenditure and tariff-based competitive bidding-led segments such as power generation, transmission and distribution, and railways. With regard to private sector capital expenditure, Nuvama is upbeat on new-age areas such as green hydrogen, electronics, and data centres.

Gaurang Shah, senior vice-president at Geojit Investments Ltd., sees public capital expenditure tied to infrastructure creation, logistics improvements, and last-mile connectivity for railways, among other areas, picking up in the second half of the ongoing calendar year.

"We believe that the capex cycle is now likely to kick off after a long wait, point number one. Point number two, we will have a lot of companies coming and setting up their shop in India because of the viability and the growth story that lies ahead, which will (be) positive for the order book for these companies," Shah said. Various capital goods companies also have a notable track record in terms of order execution, which will eventually translate into top line and bottom line growth, Shah added.

Analysts also expect the central bank's 50-basis-point cut in the policy repo rate and a 100-bps reduction in cash reserve ratio to bode well for capital expenditure in the private sector. "From a technical standpoint, the BSE Capital Goods Index has established a firm base near the 70570 level, demonstrating resilience and upside potential. It seems poised to advance towards the 71400-71700 levels in the near-term (likely a month)," said Sugandha Sachdeva, founder, SS WealthStreet. Sachdeva is bullish on two companies in the sector for the near term – Bharat Heavy Electricals Ltd. and Shakti Pumps (India) Ltd.

Earlier this week, Elara Securities increased its target price for Cummins India to INR 3,430 from INR 3,150 due to continued momentum in power, rail and data centre projects, and a potential rebound in private capex. However, the brokerage noted possible downside risks if the government focuses on clean energy over diesel generator sets and if geopolitical issues further impact export demand.

TOP HEADLINES

* BEML to pay INR 1.20 per share final dividend for FY25
* Praj Ind  to partner with Paraguay-based co Enersur for biorefinery project
* NCLT asks SKF India to hold shrholders' meet over demerger of industrial ops
* Coal India plans to commission 19 first-mile connectivity projects in FY26
* Bharat Electronics bags INR 23.23-bln order from Mazagon Dock, Garden Reach
* HAL clarifies talks with GE Aerospace to produce aircraft engines on track
* KEC Intl gets new orders worth INR 22.11 bln across business verticals
* NCLAT stays IBC proceedings against Reliance Infrastructure till Jul 18
* L&T's water, effluent treatment business gets orders from Rajasthan govt body
* RITES lowest bidder for INR 285-mln project by Gujarat Urban Development
* NCLT admits IDBI Trusteeship's insolvency plea vs RInfra, latter moves NCLAT
* Andhra body OKs INR 36.73-bln tenders for secretariat towers at Amaravati
* Engineers India subscribes to 12.57 mln shrs in Numaligarh Refinery
* IRCON Intl bags order worth INR 10.68 bln from Indian Railways
* NCLT disposes of first motion application by Samvardhana Motherson, arms
* Titagarh Rail Jan-Mar consol net profit falls 18.4% on year, sales dn 4.5%
* PTC Industries Jan-Mar consol PAT rises 67% YoY to INR 245.74 million
* Analyst Concall: Mazagon Dock sees order book jumping to INR 1.25 trln

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 Shakshi Jain

Edited by Avishek Dutta

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