Capital Goods
Stocks Outlook for the week – 19 to 23.01.2015
( www.rupeedesk.in )
Stocks of capital goods companies
are seen moving in a narrow range next week, with a positive
bias, due to lack of any
sector-specific triggers.
However, continued fall in crude
prices may impact stocks of some capital goods companies that
have a wide exposure to projects
in West Asia. In the domestic market, upcoming earnings
season as well as Union Budget
will be the key triggers in the short to medium term for the
sector. Sector major Larsen &
Toubro may shed some of its gains next week on account of profit
booking.
Initial momentum in domestic
large project orders has not sustained, overseas intake remain
muted. But long-term investors
are likely to remain bullish and may enter the stock at 1,500-
rupee level.
L&T is exposed to several
levers across business/geographic segments and has emerged as the
E&C partner of choice in India,
which provides a robust foundation to capitalize on the next leg
of investment cycle.
Electrical equipment maker
Crompton Greaves may also see some gains in the short term owing
to the demerger of its consumer
goods operation.
We anticipate multiple positives
on the horizon. CRG's (Crompton Greaves) Consumer business
demerger is scheduled to take
effect from FY16. We expect the demerged entity to use its greater
autonomy in retaining and
rewarding manpower as well as expand its distribution network faster.
