Capital Goods Stocks Outlook
Seen rangebound on US-Iran deal uncertainty
This story was originally published at 19:59 IST on 19 June 2026
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MUMBAI – Shares of capital goods companies are expected to move in a range next week amid uncertainty around the peace deal between the US and Iran. The peace deal is in limbo as Switzerland postponed the scheduled talks between the US and Iran officials, and as Israel launched new strikes in Lebanon against Hezbollah.
This week, crude oil prices dropped sharply after the US and Iran agreed on a framework for a peace deal and plans to open the Strait of Hormuz. Brent crude oil August futures fell below $80 per barrel, down more than 8% this week. This has helped ease concerns of higher costs hitting the margins of capital goods companies, making these stocks more attractive. The BSE Capital Goods index gained nearly 6% this week.
While crude oil prices have come off their highs, capital goods companies are expected to face margin pressure in the June quarter as input costs have risen since the war began in February. "Margin pressure has been more pronounced for consumer-focused EMS (electronics manufacturing services) players due to weak demand and limited pricing flexibility. However, most companies have mitigated the impact through contractual pass-through mechanisms, pricing revisions, procurement efficiencies, and operational improvements," Motilal Oswal Financial Services said in a report on Monday.
Motilal Oswal expects defence companies to find new export opportunities after the US-Iran war ends. "With a resolution of the West Asia crisis in sight, the focus would now shift toward the replenishment of ammunition, missiles, and critical inventories, alongside the acquisition and upgrade of various platforms," it said. "Focus would also be more on drones, anti-drones, electronic warfare, air defence control systems and active protection systems on both domestic and international markets. We expect these orders, along with large platform orders, to start materialising during FY27
YES Securities Wednesday raised concerns about the transmission and distribution sector, saying the high-voltage direct current projects are likely to face delays. "India's proposed submarine HVDC projects - Paradeep–Port Blair, India-Sri-Lanka, India-Singapore, face elevated execution risks due to limited cables and vessel availability, weather constraints, specialised installation requirements, and India's lack of prior experience, increasing the likelihood of project delays and cost overruns," it said. "This significantly hampers markets' expectations of 1-2 HVDC projects per annum."
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The 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 | 414.35 | 9.40 | 433.80 | 394.10 |
| CG Power and Industrial Solutions | 963.70 | 5.40 | 975.90 | 943.90 |
| Larsen & Toubro | 4209.40 | 4.00 | 4252.10 | 4140.30 |
| Siemens | 3759.60 | 5.30 | 3814.30 | 3683.10 |
| Thermax | 4702.40 | (-)0.50 | 4792.80 | 4634.80 |
| Bharat Electronics | 426.90 | 5.00 | 434.70 | 420.60 |
| Index | Levels | |||
| S&P BSE Capital Goods | 83600.96 | 6.00 | 84519.60 | 81997.30 |
| Nifty 50 | 24013.10 | 1.70 | 24132.70 | 23842.10 |
| S&P BSE Sensex | 76802.90 | 1.70 | 77156.70 | 76292.80 |
End
US$1 = INR 94.32
Reported by Anshul Choudhary
Edited by Saji George Titus
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