Capital Goods Stocks Outlook for the week – 17 to 21.10.2016

Capital Goods Stocks Outlook for the week – 17 to 21.10.2016 )

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Weak industrial production data for August and the absence of significant triggers are likely
to keep shares of capital goods companies in a range next week, with a negative bias.
India's industrial production contracted 0.7% on year in August, compared with 2.5%
contraction in July. Production of capital goods fell 22.2% in August, against 29.5% in July.
This was the 10th consecutive month that the capital goods sector, considered a proxy for
investment demand in the economy, contracted.

State-owned Bharat Heavy Electricals is likely to be in focus next week, as the company's
project execution is expected to pick up. it was optimistic, because three of its major power
projects, worth a combined 300 bln rupees, could be fast-tracked after securing the
necessary clearance. For a company of 1-trln-rupee order backlog, this is materially

Stock of Larsen & Toubro could see a slight upside to 1,490 rupees in the coming week
following a 37.99-bln-rupee order win from the Dedicated Freight Corridor Corp of India. The
order was bagged by L&T Construction, owned by L&T.