Capital Goods Stocks Outlook
Seen in range amid risk to margin on high costs
This story was originally published at 17:43 IST on 5 June 2026
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MUMBAI – Shares of capital goods companies are expected to move in a range amid risk to margins from high crude oil prices. Analysts expect these companies to report strong earnings in the long run but immediate risk to earnings due to the US-Iran war and high valuations are likely to limit any upside.
Capital goods companies have managed to increase their margins slightly during the March quarter despite seeing a surge in costs after the war broke out at the end of February. This is because companies passed on the high costs to customers, analysts said.
The 17 capital goods companies in the Nifty 200 index reported growth of just over 12% in their cumulative net profit, excluding exceptional items, for the March quarter. This was in line with analysts' expectations. These companies' revenue improved 18% over the last year's March quarter, which was better than the 16% rise expected.
Better-than-expected revenue growth has given analysts confidence that demand in the sector is strong despite the West Asia war. "Our analysis of result commentaries of nearly 30 companies in industrials, defense, and railways segments indicates multi-year growth opportunities across T&D, renewables, data centres, and defense," Motilal Oswal Financial Services, said in a report Friday. "The overall ordering outlook is also supported by selective improvement in private capex and exports, while government capex will have to be seen in the context of higher oil prices."
However, the sector is likely to face some challenges in the near term due to higher costs. Brent crude oil futures are still trading around $95 per barrel, up 30% from prices before the war started. This has already led to increase in prices of steel, plastic goods, and rubber, among others, which is likely to hit margins of capital goods companies in the coming quarters, analysts said.
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Following are the resistance and support levels for key capital goods stocks for next week as per calculations based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % |
Resistance | Support |
| Bharat Heavy Electricals | 386.95 | (-)7.20 | 407.70 | 372.20 |
| CG Power and Industrial Solutions | 937.85 | 2.20 | 962.90 | 916.10 |
| Larsen & Toubro | 3,953.20 | (-)3.00 | 4,005.80 | 3,897.60 |
| Siemens | 3,700.80 | (-)3.70 | 3,768.70 | 3,613.10 |
| Thermax | 4,832.10 | (-)3.00 | 5,033.00 | 4,686.20 |
| Bharat Electronics | 408.20 | (-)0.60 | 415.30 | 401.50 |
| Index | Levels | |||
| S&P BSE Capital Goods | 80010.94 | (-)1.00 | 81162.90 | 79127.20 |
| Nifty 50 | 23366.70 | (-)0.80 | 23622.30 | 23154.90 |
| S&P BSE Sensex | 74243.34 | (-)0.70 | 75045.40 | 73587.70 |
End
US$1 = INR 94.9450
Reported by Anshul Choudhary
Edited by Avishek Dutta
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