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Most shares of capital goods and engineering companies are seen underperforming next week, with the exception of few mid-caps and industry major, Larsen & Toubro. L&T has bottomed out and could see some bounce back in the next week.
The capital goods and engineering heavyweight is expected to remain in this range till mega and ultra mega project contracts do not return to the market. Generator sets manufacturer Cummins India, which recently reported a healthy bottomline and topline growth for Oct-Dec, will remain the sector favourite of investors, along with L&T.
The results for most capital goods companies have been below market estimates and are seen underperforming in the near term as well. Towards the end of next week, wind power equipment supplier Suzlon Energy will report its earnings for the quarter-ended in December. According to an average of estimates of two brokerages, the company is seen posting net loss of 3.07 bln rupees.
We expect in 3Q (Oct-Dec), Suzlon to report consolidated rec (recurring) loss of 3.6 bln rupees (vs loss of 2.5 bln rupees) on weak margin (-240 basis
points YoY), on weak high margin domestic volume and higher fixed cost. Mumbai-based Patel Engineering will also announce its Oct-Dec earning on Thursday, along with Suzlon Energy.
Shares of companies operating in the engineering and power sector could also see some positive movement, as investors will start building up positions ahead of the Union Budget for 2013-14 (Apr-Mar. Investors are expecting the government to announce steps in the budget that will fast-track power projects. This is likely to boost the demand in the boiler, turbine and generator segment
Most shares of capital goods and engineering companies are seen underperforming next week, with the exception of few mid-caps and industry major, Larsen & Toubro. L&T has bottomed out and could see some bounce back in the next week.
The capital goods and engineering heavyweight is expected to remain in this range till mega and ultra mega project contracts do not return to the market. Generator sets manufacturer Cummins India, which recently reported a healthy bottomline and topline growth for Oct-Dec, will remain the sector favourite of investors, along with L&T.
The results for most capital goods companies have been below market estimates and are seen underperforming in the near term as well. Towards the end of next week, wind power equipment supplier Suzlon Energy will report its earnings for the quarter-ended in December. According to an average of estimates of two brokerages, the company is seen posting net loss of 3.07 bln rupees.
We expect in 3Q (Oct-Dec), Suzlon to report consolidated rec (recurring) loss of 3.6 bln rupees (vs loss of 2.5 bln rupees) on weak margin (-240 basis
points YoY), on weak high margin domestic volume and higher fixed cost. Mumbai-based Patel Engineering will also announce its Oct-Dec earning on Thursday, along with Suzlon Energy.
Shares of companies operating in the engineering and power sector could also see some positive movement, as investors will start building up positions ahead of the Union Budget for 2013-14 (Apr-Mar. Investors are expecting the government to announce steps in the budget that will fast-track power projects. This is likely to boost the demand in the boiler, turbine and generator segment
