Capital Goods Stocks Outlook
Seen in range amid high stock valuations
This story was originally published at 17:03 IST on 19 December 2025
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MUMBAI – Shares of capital goods companies are likely to move in a range next week as high stock valuations are expected to limit gains even as several companies in the sector have strong growth visibility for the next 2-3 years. There is a possibility of further stock price corrections due to high valuations, analysts said.
Further gains in capital goods stocks are likely to hinge on signs of improvement in private-sector capital expenditure, as government spending has slowed, they said. JM Financial Institutional Equities said orders in the infrastructure sector declined by over 42% on year and tenders by 1% in November.
The government's capital expenditure in October fell more than 28% on year to nearly INR 370 billion. The fall comes after the government has already frontloaded the capital expenditure in the first half of 2025-26 (Apr-Mar). The government's capital expenditure rose nearly 40% on year in Apr-Sept.
The government is now expected to control its spending in view of its announcements to reduce goods and services tax rates and increase tax rebates for salaried employees. According to a report from brokerage Nomura, the government incurred a revenue loss of around 240 billion in November due to the GST rate cuts.
"We expect the government to meet its FY26 fiscal deficit target of 4.4% of GDP, but it will require expenditure consolidation in the coming months," Nomura said. This is likely to affect order inflows in the second half of this financial year for companies that depend on government orders.
The BSE Capital Goods index fell for the fifth straight week on Friday, declining nearly 6% during this period. This week, it was down 0.4% with Hitachi Energy India, Cummins India, and PTC Industries down 4-5%. Among others, shares of Praj Industries rose 13% this week, and those of Kirloskar Oil Engines gained nearly 9%.
Several companies in the sector are expected to benefit from the Nuclear Energy Bill, which was cleared by the Lok Sabha this week. The bill proposes a slew of structural reforms, including an independent nuclear safety authority and a dedicated nuclear tribunal.
Elara Securities said the bill is likely to benefit companies that have planned investments towards small modular reactors to phase out old coal plants. Companies such as NTPC, Tata Power, Reliance Industries, Adani Power, may see benefits, the brokerage said.
TOP HEADLINES
* RInfra, RPower get shareholder OK to raise funds via foreign currency bonds
* Neo Infra Income Opportunities Fund to acquire two SPVs of HG Infra
* Patel Engg in pact with Arunachal govt for 144 MW hydropower project
* Titagarh Rail bags order worth INR 2.73 billion from Ministry of Railways
* Texmaco Rail bags INR 67-mln order from Western Railway
* L&T wins multiple EPC orders for buildings, factories business in India
* Suzlon Energy gets 306 MW wind turbine order from Yanara Power in Rajasthan
* Telangana to complete Hyderabad metro rail takeover from L&T arm by March
* BEML gets order worth INR 1.10 bln to supply engines to defence ministry
* Texmaco Rail JV awards INR 1.32-bln order to supply rake of wagons
* Ashoka Buildcon JV wins INR 10.4-bln order from Brihanmumbai Municipal Corp
* CARE Ratings' outlook on Kirloskar Brothers' long-term bk facilities positive
* KEC International gets orders worth INR 11.50 bln across segments in India
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 | 275.75 | (-)3.30 | 280.80 | 270.00 |
| CG Power and Industrial Solutions | 671.60 | 0.90 | 682.30 | 654.30 |
| Larsen & Toubro | 4073.50 | (-)0.00 | 4119.80 | 4017.00 |
| Siemens | 3111.60 | (-)1.10 | 3156.50 | 3042.50 |
| Thermax | 2869.90 | (-)0.00 | 2899.30 | 2831.10 |
| Bharat Electronics | 392.85 | 0.90 | 400.00 | 380.00 |
| S&P BSE Capital Goods | 66534.02 | (-)0.40 | 67307.30 | 65112.90 |
| Nifty 50 | 25966.40 | (-)0.30 | 26059.60 | 25833.80 |
| S&P BSE Sensex | 84929.36 | (-)0.40 | 85243.10 | 84578.10 |
End
Reported by Anshul Choudhary
Edited by Saji George Titus
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