Capital Goods Stocks Outlook for the week – 15 to 19.05.2017
Capital Goods Stocks Outlook for the week – 15 to 19.05.2017
( www.rupeedesk.in )
Stocks of capital goods companies are expected to trade with a positive bias next week, as sentiment on the sector
has improved, following the government's recent ordinance on non-performing assets. Stocks of most companies in
the segment, barring Bharat Heavy Electricals, gained 0.9-17% this week, while the BSE Capital Goods Index rose
1.4%. The government's banking ordinance is seen as a big positive for the capital goods sector, as it will boost
future investments in areas such as railways, roads, and transmission and distribution. On May 5, the government
notified the Banking Regulation (Amendment) Ordinance, 2017, giving the Reserve Bank of India more teeth in the
fight against stressed loans in the banking system, estimated at about 10 trln rupees. In the upcoming week,
sector heavyweight Larsen & Toubro is likely to see an upside, riding on the back of a 45-bln-rupee order win from
the Indian Army, announced yesterday.
Market participant would keep an eye on BHEL in the near term, after Norway's sovereign wealth fund Government
Pension Fund Global decided not to invest in the company on ethical grounds. The world's largest sovereign wealth
fund said BHEL had been excluded based following an assessment of the risk of severe environmental damage due
to some state-owned company's projects. Analysts are bullish on the Siemens stock next week, after the company
reported a 5.2% on-year rise in total income from operations at 30.51 bln rupees for Jan-Mar, beating expectations
of a flat top line. The company's net profit came in at 1.86 bln rupees, down marginally from 1.88 bln rupees for
the year-ago period. Its (Siemens's) presence from trains to turbines ensures that the company's revenue growth
has high correlation to the government and private sector spending.
Source : Cogencis Information Services Ltd.
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Capital Goods Stocks Outlook for the week – 15 to 19.05.2017
( www.rupeedesk.in )
Source : Cogencis Information Services Ltd.
