GOLDEN RULES FOR TRADING

Capital Goods Stocks Outlook for the week – 02 to 06.11.2015 Seen weak; Cummins, ABB earnings eyed

Capital Goods Stocks Outlook for the week – 02 to 06.11.2015
Seen weak; Cummins, ABB earnings eyed
  www.rupeedesk.in )

Stocks of capital goods companies are seen trading with a negative bias next week, as
negative sentiment from the weak earnings and muted growth outlook of sector
heavyweight Larsen & Toubro is likely to weigh.

The company, which reported its earnings towards the fag end of the trading session
yesterday, cut its order inflow guidance for 2015-16 (Apr-Mar) to 5-7% from 15%
growth aim earlier. It also said there is bleak order visibility in the domestic heavy
engineering segment and sees domestic private sector capital expenditure recovery at
least a year and a half away.

Next week, power and automation solution maker ABB India will detail its earnings on
Tuesday, while engines and generator set maker Cummins will do the same on Thursday.
State-owned Bharat Heavy Electricals will detail its earnings on Friday.

ABB India is seen reporting Jul-Sep net profit of 689 mln rupees, up 53% on year and net
sales of 19.91 bln rupees, up 9% on year. Cummins India is seen reporting net profit of
2.07 bln rupees, up 2% on year and net sales of 13.11 bln rupees, up 17% on year. With
L&T cutting its order inflow guidance, shares of other heavy engineering companies like
Thermax and BHEL, among others are likely to see some downward pressure next week.