GOLDEN RULES FOR TRADING

Capital Goods Stocks Outlook for the week – 13 to 17.07.2015

Capital Goods Stocks Outlook for the week – 13 to 17.07.2015
(Stocks are likely to trade in a narrow range)

Stocks of most capital goods companies are seen opening weak and trading in a narrow range next
week, owing to negative industrial growth data detailed today, after market hours. Overall, India's
industrial growth slowed to 2.7% in May from 3.4% a month ago, primarily due to moderation in
capital goods growth and contraction in consumer goods, data released by the Central Statistics
Office showed.

Data for capital goods sector brought nothing to cheer, as well. The output of capital goods segment-
-an indicator of investment demand--rose just 1.8% in May against 6.8% in April, and 4.2% a year
ago.

The quarterly tracker on project investment activity in India was released by CMIE last week. The
trends are still not very encouraging with orders outstanding witnessing only a modest uptick while
new project announcement witnessing a moderation year-on-year momentum.

Investors are seen to be cautious on the capital goods segment, as most management officials of
companies in the sector have shared a subdued outlook for order inflows for 2015-16 (Apr-Mar).
Also, another likely source of disappointment can be the upcoming earnings season.