CAPITAL
GOODS STOCKS OUTLOOK FOR THE WEEK – 25 TO 28.08.2014
( www.rupeedesk.in )
Stocks of most
capital goods companies are likely to trade within a narrow range next
week due to a lack of
major triggers for the sector. There was some price correction this
week after the end of
the earnings season, and usually the only fundamental triggers for
these stocks are
financial results and order wins. There are no major macro-policy
changes expected in
the near term, so the stocks should remain in a range.
While Bharat Heavy
Electricals is vulnerable because of its inability to finalise orders,
Siemens' order book
is not strong, and due to project cost revisions, its margins are not
certain. Valuations
of Crompton Greaves and Voltas have improved significantly over the
past few months. They
are still attractively priced and have plenty of headroom to rise
over the next few
months.
Investors looking to
hold the L&T for a five to seven month period should look to buy it
on dips. The
company's stocks could also react to management commentary at its annual
general meeting,
which took place after market hours yesterday. L&T's Chairman A.M.
Naik said he expects
the company to get three more dedicated freight corridor tenders,
and will also bid for
bullet train projects, which were mentioned during the National
Democratic Alliance
government's Budget in July. Among the other stocks, both Siemens
and Crompton Greaves
are likely to remain range bound next week.
