Capital Goods Stocks Outlook for the week - 07 to 11.11.2016
Stocks of capital goods companies are likely to correct further next week, in line with the broader
market, largely due to lack of significant triggers in the short term. Most capital goods companies
fell 3-6% during the week, while the BSE Capital Goods index declined 3.4%. Overall outlook for the
sector remains grim amid a muted execution environment.
Sector heavyweight Larsen & Toubro could see some downside next week after the Specified
Undertaking of the Unit Trust of India sold 1.63% stake in the company through block deals, raising
about 21 bln rupees. It holds 8.32% stake in L&T. The stock could face resistance at 1,450 rupees
and find strong support at 1,380 rupees. State-owned Bharat Heavy Electricals' prospects look dull
in the near term with little order book support that the stock can fall to 120 rupees by the end of
next week.
Stocks of Crompton Greaves, however, might see slight gains as the company expects to complete
the sale of its overseas transmission and distribution business by the end of November. The
company plans to sell most of its assets to pare debt and focus on core operations in India, it said. As
of Mar 30, the company's total debt was at 12.36 bln rupees. Thermax as the company will detail it
earnings for the September quarter on Thursday.
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market, largely due to lack of significant triggers in the short term. Most capital goods companies
fell 3-6% during the week, while the BSE Capital Goods index declined 3.4%. Overall outlook for the
sector remains grim amid a muted execution environment.
Sector heavyweight Larsen & Toubro could see some downside next week after the Specified
Undertaking of the Unit Trust of India sold 1.63% stake in the company through block deals, raising
about 21 bln rupees. It holds 8.32% stake in L&T. The stock could face resistance at 1,450 rupees
and find strong support at 1,380 rupees. State-owned Bharat Heavy Electricals' prospects look dull
in the near term with little order book support that the stock can fall to 120 rupees by the end of
next week.
Stocks of Crompton Greaves, however, might see slight gains as the company expects to complete
the sale of its overseas transmission and distribution business by the end of November. The
company plans to sell most of its assets to pare debt and focus on core operations in India, it said. As
of Mar 30, the company's total debt was at 12.36 bln rupees. Thermax as the company will detail it
earnings for the September quarter on Thursday.
