Capital Goods Stocks Outlook for the week – 10 to 14.08.2015
(Seen
trading in range bound)
( www.rupeedesk.in )
Most
capital goods stocks are seen trading in range next week, taking cues from
developments in
Parliament
and macroeconomic data to be released midweek.
Only
one major capital goods company, Tata Enterprises-owned Voltas Ltd, will detail
its earnings next week. The earnings season so far has been disappointing, with
the exception of Siemens and Cummins India, who surprised the market with
better-than-expected operating margins as well as bottomline performance.
Siemens
and Cummins reported their earnings on Wednesday and Thursday, resulting in
their shares rising significantly thereafter. But on Friday, state-owned major
Bharat Heavy Electricals reported an 82.5% on-year fall in Apr-Jun net profit.
Given
this trend, investors are seen preferring short-cycle product companies over
long-cycle project companies. For the reversal of fortunes of project companies
such as Larsen & Toubro, BHEL and Thermax, a wider improvement in economic
environment is necessary.
The
macroeconomic situation will get some direction when the consumer price
inflation and industrial production
data are released post market hours on Wednesday.
