Capital Goods Stocks Outlook
Seen in range as Q1 margin hit due to high cost
This story was originally published at 22:44 IST on 7 August 2026
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MUMBAI – Shares of capital goods companies are likely to move in range amid margin pressure due to higher costs and expensive stock valuations. Companies have taken a big hit to margins in the June quarter and there is possibility it may continue in the September quarter as well, analysts said.
"Margin pressure was visible across the board, particularly for companies with higher exposure to short-cycle contracts. Select players have also undertaken price hikes to offset the pressure, although there remains a time lag before these price increases are fully absorbed and reflected in margins," Motilal Oswal Financial Services Ltd. said in report Thursday. While commodity prices have come down since tensions between the US and Iran eased, the brokerage expects companies to benefit from lower input costs only from the December quarter.
Apart from this, valuations across segments remain high, which is likely to limit any gains even as crude oil prices have come off highs. "Defence and Power Generation & Distribution remained the most expensive sectors, trading well above their LTAs (long term averages) and SD (standard deviation) levels despite some moderation in Defence valuations," Elara Securities said on Monday.
Capital goods stocks have seen gains recently after crude oil futures dropped to around $80 per barrel from around $100 per barrel just two weeks back. The BSE Capital Goods index rose nearly 3% this week, but it is still down 6.5% from its 52-week high touched in June.
Among major companies, Hindustan Aeronautics is scheduled to report its earnings on Wednesday. The company's net profit is expected to rise over 10% on year in the June quarter to INR 15.22 billion and revenue is expected to rise nearly 12% to INR 53.92 billion, according to the average of estimates from nine brokerages.
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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 | 405.20 | (-)0.40 | 425.20 | 392.20 |
| CG Power and Industrial Solutions | 879.00 | 1.80 | 887.30 | 865.90 |
| Larsen & Toubro | 4,056.00 | 3.00 | 4,081.30 | 4,017.30 |
| Siemens | 3,940.10 | 4.80 | 4,012.00 | 3,885.00 |
| Thermax | 4,059.90 | (-)5.70 | 4,126.10 | 3,957.70 |
| Bharat Electronics | 401.00 | 3.40 | 405.40 | 396.10 |
| Index | Levels | |||
| S&P BSE Capital Goods | 79282.73 | 3.00 | 79893.30 | 78570.10 |
| Nifty 50 | 24570.65 | 0.80 | 24682.30 | 24467.00 |
| S&P BSE Sensex | 78499.17 | 0.50 | 78924.90 | 78164.20 |
End
Reported by Anshul Choudhary
Edited by Deepshikha Bhardwaj
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