www.rupeedesk.in
Stocks of capital goods and engineering companies are likely to trade in a thin band with a negative bias, as investors see a weak earning season for the sector, Larsen & Toubro being the only exception. Investors have shown concern over muted order inflows in the capital goods sector in Jan-Mar, which is traditionally the strongest quarter for the industry, given that most government orders are finalised during this period.
Private sector capital expenditure is also unlikely to improve in the short term given the macroeconomic headwinds.However, investors are positive on Larsen & Toubro, as it is expected to meet the guidance for order inflows in the quarter. Some investors are also positive on Crompton Greaves, as they expect the stock to improve in the next few quarters.
Investors are likely to pick diesel-powered generator maker, Cummins India, as the company is expected to report robust earnings for Jan-Mar. Capital goods and engineering company Siemens disappointed by posting below-than-expected Jan-Mar result. Its Jan-Mar net profit fell 90% on year owing to delay in execution that also led to revision of revenue and cost for some projects.
Environment remains difficult in the capital goods segment due to lack of capex in key industries and fresh power capacity addition. New project announcements continue to be sluggish and macroeconomic indicators do not point towards a revival in near future.
Stocks of capital goods and engineering companies are likely to trade in a thin band with a negative bias, as investors see a weak earning season for the sector, Larsen & Toubro being the only exception. Investors have shown concern over muted order inflows in the capital goods sector in Jan-Mar, which is traditionally the strongest quarter for the industry, given that most government orders are finalised during this period.
Private sector capital expenditure is also unlikely to improve in the short term given the macroeconomic headwinds.However, investors are positive on Larsen & Toubro, as it is expected to meet the guidance for order inflows in the quarter. Some investors are also positive on Crompton Greaves, as they expect the stock to improve in the next few quarters.
Investors are likely to pick diesel-powered generator maker, Cummins India, as the company is expected to report robust earnings for Jan-Mar. Capital goods and engineering company Siemens disappointed by posting below-than-expected Jan-Mar result. Its Jan-Mar net profit fell 90% on year owing to delay in execution that also led to revision of revenue and cost for some projects.
Environment remains difficult in the capital goods segment due to lack of capex in key industries and fresh power capacity addition. New project announcements continue to be sluggish and macroeconomic indicators do not point towards a revival in near future.
