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Informist, Friday, Sept. 12, 2025

MUMBAI – Shares of capital goods companies are likely to move in a range next week amid expectations that the government may reduce its capital expenditure to offset lower tax revenue. Lower GST rates are expected to have a small impact on the overall sector, likely helping some companies reduce costs, analysts said.

JM Financial Securities raised concerns that weak tax collection may impact capex in some segments. The government's gross tax mop-up in the first four months of 2025-26 (Apr-Mar) was up only 0.8% on year at INR 10.93 trillion. Further, tax collection fell nearly 12% on year in July.

The brokerage expects some hit to capex for railways and that earmarked for Jal Shakti projects. However, it doesn't expect a major impact on transmission and distribution, power generation, and renewable energy sectors as capex in these segments is funded through central public sector units.

Capital expenditure by the government so far this financial year is strong on a low base of last year. For the first four months of FY26, the government's capital expenditure was INR 3.47 trillion, up almost 33% from the year-ago period, as per data from the Controller General of Accounts.

However, capex by the government showed some signs of a slowdown in July, likely due to the monsoon, the brokerage said. In July, capex by the government actually declined 10% on year to INR 71.79 billion.

The BSE Capital Goods index rose over 4% this week. Shares of Apar Industries, Titagarh Rail Systems, Mazagon Dock Shipbuilders, and Bharat Dynamics were up 8-11% 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:

End

Reported by Anshul Choudhary

Edited by Avishek Dutta

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