Capital Goods Stocks Outlook
Seen in range amid risks from high costs
This story was originally published at 22:06 IST on 28 August 2026
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MUMBAI – Shares of capital goods companies are seen in range amid expectations of a hit to their margins in upcoming quarters owing to high input commodity prices. Further, high stock valuations limit any upside despite several segments, such as transmission and distribution and data centres, reporting strong growth in order wins during the June quarter, brokerages said.
"Most of the sector companies faced margin headwinds due to commodity cost volatility, higher freight costs, and rising execution expenses," HDFC Securities said in a report Tuesday. The brokerage pointed out that the roads segment has seen poor order inflows and defence companies also saw subdued growth in orders as some of the large orders were delayed.
Several analysts have expressed concern over the margins of capital goods companies if crude oil prices remain high. Brent crude oil futures hovered around $90 per barrel this week, up 24% from the level before the US-Iran war began. Concerns around margins and order wins pushed analysts at Equirus Securities to downgrade several industrial and defence stocks after their June quarter earnings, according to a report by the brokerage.
Analysts are also worried that higher crude oil prices and higher subsidies for the fertiliser sector may push the government to limit capital expenditure in the quarters to follow. Nomura expects the government to miss its fiscal deficit target of 4.3% of GDP by 20 basis points due to higher subsidies. Till June, the government's capital expenditure had showed strong growth of 24% on year at 3.40 trillion in the June quarter. The July figures of capital expenditure are scheduled to be released Monday.
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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 | 430.85 | 4.30 | 441.20 | 421.90 |
| CG Power and Industrial Solutions | 889.00 | 2.50 | 906.10 | 869.60 |
| Larsen & Toubro | 4,045.80 | (-)1.20 | 4,081.10 | 4,003.70 |
| Siemens | 4,089.00 | 4.30 | 4,140.30 | 4,034.30 |
| Thermax | 3,944.20 | (-)0.60 | 4,023.70 | 3,894.70 |
| Bharat Electronics | 411.90 | (-)0.50 | 415.00 | 405.70 |
| Index | Level | |||
| S&P BSE Capital Goods | 79514.98 | 0.40 | 80049.90 | 78936.80 |
| Nifty 50 | 24175.65 | (-)0.30 | 24258.40 | 24035.50 |
| S&P BSE Sensex | 77264.51 | (-)0.40 | 77573.30 | 76833.80 |
End
US$1 = INR 95.37
Reported by Anshul Choudhary
Edited by Rajeev Pai
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