Capital Goods Stocks Outlook for the week – 01 to 05.02.2016
Seen
in range with negative bias
( www.rupeedesk.in )
Stocks
of capital goods stocks are seen trading in range with a negative bias in the
upcoming
week, after sector bellwether Larsen & Toubro cut its order inflow
guidance.
The company expects its order inflows for 2015-16 (Apr-Mar) to be flat on
year.
L&T has already cut its order inflow guidance for 2015-16 to 5-7% in
October
from
15% at the beginning of the financial year. The company has guided for a 10-
15%
revenue growth in 2015-16. L&T reported Oct-Dec consolidated net profit of
10.35
bln rupees, up 19.42% on year, and higher than analysts' estimates. Net sales
for
the
quarter ended December were 253.87 bln rupees, up 7.6% on year.
The
coming week will also see more capital goods companies reporting earnings--
Crompton
Greaves and Cummins posting results on Tuesday, while ABB India to
detail
its earnings on Thursday. The Avantha Group-owned Crompton Greaves is
widely
expected to report weak quarterly earnings, as its mainstay power equipment
business
is likely to continue to be under pressure.
Performance
of the overseas business is likely to be volatile, largely given the stated
intent
to hive off the businesses; this could impact productivity in the interim,
impacting
reported financials. Tulsi Tanti-owned wind turbine maker Suzlon Energy
detailed
its Oct-Dec earnings yesterday, reporting a net loss of 1.13 bln rupees,
against
analysts' estimates. The company's income from operations for the December
quarter was 18.89 bln rupees, down 61.87% on year.