Capital Goods Stocks Outlook
Seen moving higher next 2 weeks
This story was originally published at 21:13 IST on 27 June 2025
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NEW DELHI – Stocks of capital goods companies are seen trading in positive territory over the next two weeks, according to some analysts. "The near-term (15 days) outlook would be positive, but market participants should keep a close watch on 71750-odd levels (BSE Capital Goods index)," Sugandha Sachdeva, founder of SS WealthStreet, told Informist. Sachdeva said that only if the 71750 level is breached convincingly does her firm see further upside towards 72500–72550 levels. "All eyes would now be on the trade negotiatiations as the pause on reciprocal tariffs, the deadline for that ends on Jul. 9, and there would be a lot of uncertainty regarding that," Sachdeva said.
Over the medium-to-long term, analysts expect some consolidation to play out because of expensive valuations of stocks of several companies in the sector. The analysts are, however, bullish on transmission and distribution companies, which are expected to log higher margins, benefiting from limited competition and strong demand. An analyst, who tracks the capital goods sector for a large domestic brokerage, said he expects a pick-up in capital expenditure by the private sector in the next six months.
Earlier this week, YES Securities in a report on the capital goods sector said it is seeing signs of an industrial slowdown driven in part by signs of "exhaustion" in government capital expenditure, lack of material recovery in private capital expenditure, and the China+1 policy not playing out as desired. The brokerage added that earnings, which had grown at a compounded annual growth rate of more than 20% from the financial year 2018-19 (Apr-Mar) to FY25, are likely to decelerate sharply amidst peaking margins, sales growth slowdown, persistent global trade uncertainties, and muted domestic consumption. However, it sees strong growth potential in select end markets, particularly data centres, railways, power generation, and transmission.
On fears tied to capacity addition plans amid weaker-than-anticipated power demand, ICICI Securities in a report said companies believe demand fluctuation for short periods does not warrant any course correction. It added that some power companies are facing execution delays due to challenges in power purchase agreement tie-ups, land acquisition, and transmission connectivity. Meanwhile, according to Elara Securities, the entry of large firms such as UltraTech Cement and the Adani group, in the cables and wires segment may hit the robust growth momentum seen by existing players in the past few years, but only if supply catches up with demand after 2-3 years.
Friday, the BSE Capital Goods index closed at 71548.78 points, up 0.8%. Over the week, the index has risen almost 2%, similar to the BSE Sensex.
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Following are the resistance and support levels for the stocks for next week, as per calculations based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Bharat Heavy Electricals | 264.10 | 5.50 | 270.40 | 260.00 |
| CG Power and Industrial Solutions | 672.20 | (-)2.30 | 697.30 | 657.50 |
| Larsen & Toubro | 3,679.20 | 0.50 | 3,758.30 | 3,625.50 |
| Siemens | 3,178.40 | (-)1.10 | 3,312.00 | 3,098.20 |
| Thermax | 3,347.80 | (-)2.20 | 3,513.90 | 3,247.90 |
| Bharat Electronics | 414.50 | 1.50 | 420.90 | 406.30 |
| S&P BSE Capital Goods | 71548.78 | 1.90 | 72302.60 | 70725.50 |
| Nifty 50 | 25637.80 | 2.10 | 25735.80 | 25474.50 |
| S&P BSE Sensex | 84058.90 | 2.00 | 84375.20 | 83487.30 |
End
Reported by Shakshi Jain
Edited by Rajeev Pai
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