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Informist, Thursday, Nov. 27, 2025

MUMBAI – Shares of capital goods companies are expected to largely consolidate in the coming week, according to technical analysts. Outlook for the sector remains cautious on a likely decline in government capital expenditure and as private capital expenditure is yet to pick up. 

In Apr-Oct, the government's capital expenditure grew INR 6.2 trillion from INR 4.7 trillion a year ago, data released by the statistics ministry Friday showed. This was 55% of the Budget target for the current financial year as against 42% in the same period last year. Economists expect the capital expenditure to contract by 14% in the remaining part of 2025-26 (Apr-Mar) in order to stay within the Budget Estimates, the Business Standard newspaper reported Friday. 

Over the week, the BSE Capital Goods index fell 0.2% compared to the rise of 0.5% and 0.6% in the benchmark indices Nifty 50 and Sensex, respectively. The index has been on a losing run for the second straight week. In November, the index fell nearly 2% after gaining for the previous two months. 

Next week, the index is seen finding support at 68345 points, Bhavya Shah, technical analyst at StoxBox, said. "A break below this level (68345 points) could trigger fresh selling pressure," he said. The index is seen finding resistance at 69725 points, "where the 50 DMA converges", with further resistance seen at 70432 points, Shah added. 

In the September quarter, the sales of capital goods compaies grew 21% on year, while gross margin was broadly flat. Despite flat gross margin, earnings before interest, tax, depreciation, and amortisation margin improved 107 basis points and net profit margin grew 162 bps on year driven by continued strong demand from the domestic power transmission and distribution space. Additionally, healthy execution in project companies, despite prolonged monsoons, aided the earnings growth during Jul-Sept. While capital goods companies are expected to continue their earnings growth momentum, challenges related to demand and sales are expected to continue for the remaining two quarters of the current financial year.

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Following are the resistance and support levels for capital goods stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Arya S. Biju

Edited by Tanima Banerjee

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