Capital Goods Stocks Outlook for the week – 04 to 08.05.2015
( www.rupeedesk.in )
Stocks
of most capital goods companies are seen trading in a narrow range next week,
adding that stock of Larsen & Toubro may see some gains due to value
buying. Though the new government has taken steps to remove bottlenecks and
improve the policy environment, yet the delay in the revival of the investment
cycle is likely to limit upside for some of the large (capital goods) companies
in the near term. Thus, it is advisable to be selective.
We prefer
quality stocks like L&T. The sector bellwether fell nearly 3% this week
tracking wider market. However, long term investor may see an opportunity to
enter the stock if it falls to below 1,600-rupee-per-share level.
The
next week will also see Bengaluru-based power and automation major ABB India
reporting Jan- Mar earnings on Tuesday. The company plans to further reduce
direct raw material costs to 65% of revenues. This could lift the company's
operating margin in Jan-Mar.
