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Informist, Friday, Oct. 24, 2025

MUMBAI – Capital goods companies may see a slight fall in the coming weeks as investors continue to move away from stocks dependent on the capital expenditure to those driven by consumption. Further, there is a risk of earnings slowdown for capital goods companies as margins may come under pressure, analysts said.

"Order inflows may come down further in Q3 and Q4 as private capex is not looking very strong," said Harshit Kapadia, a research analyst covering the sector for Elara Securities. Geopolitical uncertainties such as US tariffs and prolonged war in Israel and Europe have affected order inflows and even margins of these companies, Kapadia said.

Stock valuations are another concern among analysts due to risks of slowdown in earnings growth. BSE Capital Goods index has given a return of less than 2% over 12 months against 5% gain in the BSE Sensex during the same period. While returns have been poor recently, analysts said a further fall in stocks cannot be ruled out due to tariff uncertainty. US tariffs have already started impacting business and are leading to delay in order finalisations, analysts said.

Brokerage Prabhudas Lilladher said in its report the sector's order inflows during the quarter may rise just over 2% on year in the September quarter compared with a 32% rise in the June quarter and over 4% rise in the September quarter last year.

Earnings estimates of the latest quarter show the 15 capital goods companies in the Nifty 200 index are likely to report a cumulative revenue growth of 16% on year, as per figures collated from 10 brokerages. The same set of companies had seen a sales growth of 13% in the June quarter and a 15% rise in the September quarter of last year.

The cumulative net profit of 15 companies is expected to rise 27% on year. It is better than the 18% rise in the net profit, excluding exceptional items, during the June quarter and nearly 11% rise in the September quarter of 2024. Several major companies in the sector are set to report their September quarter earnings next week. Larsen & Toubro will come out with its results on Wednesday and Bharat Electronics will release its results on Friday.

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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 Akul Nishant Akhoury

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