Capital Goods Stocks
Outlook – 26 to 30.05.2014
(www.rupeedesk.in)
Next week, investors are likely to remain bullish on most
capital goods sector stocks,
especially those catering to power sector, in the
anticipation that the new central
government may announce policy for revival of power sector.
We are positive on L&T
due to improvement in macro-economic parameters and
potential uptick in the
investment cycle, the new government having to carry on the
process initiated by its
predecessor, also given growth imperative and market
feedback and limited downside in
valuations with the stock trading at 15 times (core
earnings).
Despite the positive sentiment in the market regarding
capital goods, most companies in
the sector are seen reporting lower-than-last year profits.
Capital goods and infrastructure
sector major L&T will detail their Jan-Mar earnings on
May 30. First resistance for the
shares of the company is seen at 1,560 rupees, while the
second is seen at 1,600 rupees.
Among the other company's detailing Jan-Mar earnings next
week are electrical
equipment maker Crompton Greaves, power distribution
infrastructure maker Kalpataru
Power
Transmission, Thermax and consumer goods company Voltas.