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Informist, Friday, Aug. 8, 2025

 

MUMBAI – Shares of capital goods companies are likely to fall next week on weak sentiment in the overall market over steep tariffs by the US and outflows by foreign investors. Shares of companies that have significant business from the US are seen at risk of a big fall as well.

 

Having said that, analysts largely expect only a marginal impact on a large part of the capital goods universe from the steep 50% tariff imposed by the US as only a handful of companies have significant exposure to the country. An analyst from a foreign brokerage said Honeywell Automation India, Timken India, and Ingersoll-Rand are among the companies with significant exposure to the US. These companies record 9-13% of their sales from the US, he said.

 

Analysts have largely been positive about capital goods companies' earnings growth in the June quarter, especially companies in the transmission and distribution business and those in engineering, procurement, and construction. "Companies have surprisingly sustained their margins (in Apr-Jun)," the analyst at a foreign brokerage said.

 

"The 1QFY26 (Apr-Jun) results for the capital goods and defense sectors so far indicate a broadly positive trend, driven by robust order inflows, healthy execution in core segments, and margin stability in most names," Motilal Oswal Financial Services, said in their strategy report Monday. "capex momentum in both domestic and global markets remains supportive, especially in T&D (transmission and distribution), defense platforms, and energy transition themes, though select names are yet to reflect the benefits fully in their financials."

 

Companies dependent on government orders are doing well, but the businesses dependent on demand from private companies are struggling, anaysts said. Outlook for such companies may remain bleak for some time as private companies are unlikely to spend on capital expenditure until the threat from tariffs eases.

 

Friday, the BSE Capital Goods index ended lower for the fifth straight week. The index has fallen nearly 8% in this period. Among the index constituents, shares of Thermax, Triveni Turbine, and Carborundum Universal fell 9-13% 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	222.71	(-)3.80	231.60	217.80
CG Power and Industrial Solutions	666.40	2.30	690.10	652.10
Larsen & Toubro	3607.60	0.60	3685.60	3561.00
Siemens	3031.80	0.30	3191.30	2943.30
Thermax	3272.70	(-)13.40	3370.80	3183.00
Bharat Electronics	384.60	2.00	389.00	381.40
S&P BSE Capital Goods	66751.26	(-)1.60	68386.60	65842.50
Nifty 50	24363.30	(-)0.80	24676.80	24180.80
S&P BSE Sensex	79857.79	(-)0.90	80835.90	79286.80

 

End

 

Reported by Anshul Choudhary

Edited by Rajeev Pai

 

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