Capital Goods Stocks Outlook For The Week – 25 to 29.09.2017

Capital Goods Stocks Outlook For The Week – 25 to 29.09.2017

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Capital Goods Stocks Outlook For The Week – 25 to 29.09.2017 )

Stocks of capital goods companies are likely to move in a narrow range next week due to lack of significant triggers. While the capital goods output has grown on a sequential basis in July, it still
contracted 1% on year, according to data released by the Central Statistics Organisation. The weak data set will further lower spirits of the entire capital goods' pack in the near term. Over the long term, the market leader has a positive outlook due to the size of its current order book, and diverse portfolio. Stocks in the capital goods sector are likely to fall over the next few weeks as order inflow in the sector has been slow for the past few months. State-owned Bharat Heavy Electricals Ltd currently has a weak order book, due to a slowdown of orders in the thermal power sector. Low order carry and weak near term outlook of the capital goods segment will weigh on Thermax's stock over the next few quarters. The company's foray into manufacturing in Indonesia will help support growth of its energy business even as it sees a fall in the thermal power capacity addition in India. CG Power and Industrial Solutions Ltd also faces stiff completion for order wins in the midst of improving its net debt.

Source : Cogencis Information Services Ltd.