Capital Goods Stocks Outlook for the week – 21 to 24.12.2015
(Rangebound trade with positive
volatility)
( www.rupeedesk.in )
Stocks
of capital goods companies is seen range bound next week with a
slight
positive bias. Sector bellwether Larsen & Toubro is also seen
gaining
marginally on the back of news that the company has secured a
10-bln-rupee
defence order. Stocks of Bharat Heavy Electricals are also
seen
gaining.
Long-term
investors are likely to take the benefit of the steep decline
in
L&T stock prices and enter the stock at the current levels. Separately,
towards
the fag end of the current week, the company announced it has
been
awarded a 17-bln-rupee order for construction of roads for the
Dholera
smart city and a 10-bln-rupee contract for supply of weapon
system,
fire control systems, and missile casing for Pinaka rocket
launcher.
These developments are being viewed positively for the
company,
which has been seeing a decline in its order inflows for the past
two
quarters.
Developments
in the Rajya Sabha will also be keenly eyed by market
participants
next week. The winter session, which has seen a stalemate so
for,
ends on Wednesday--with the fate of major bills such as the one on
Good
and Service Tax still uncertain.
Stocks
of product companies such as Cummins India, KEC International
and
Kalpataru Power Transmission are also seen accumulating further
gains
next week.
Investors
continue to prefer Kalpataru Power and KEC International as
increase
in government spending in transmission sector is seen benefiting
these
companies.