Capital Goods Stocks Outlook For The Week – 18 to 22.12.2017

Capital Goods Stocks Outlook For The Week – 18 to 22.12.2017

             Equity Cash/Futures/Options Segment 

The shares of capital goods companies are seen falling further next week due to a weak outlook for the sector and also as data released on Tuesday showed a contraction in the segment output. Focus will be on shares of Siemens Ltd and Havells India Ltd that may buck the general trend in the sector.
Data released earlier this week showed the Index for Industrial Production growing 2.28% in October, lower than the 3.8% growth in September and sharply lower than the 4.2% growth recorded in October last year. Output growth of capital goods in October was at 6.8% as against an 8.2%
growth a month ago. We expect Siemens to benefit from its advancement in digitalisation services,
healthy order book, and infrastructure available to compete aggressively for upcoming orders. We are positive on shares of Havells India due to the company's planned expansion across all major businesses. Most thermal power companies, including state-owned Bharat Heavy Electrical Ltd, Pune-based Thermax Ltd, and CG Power & Industrial Solutions Ltd are expected to trade in line with broader market over the short to medium term. The order inflow of thermal power companies is eyed for any movement in the prices of stock of these companies.

Source : Cogencis Information Services Ltd.

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