Capital Goods Stocks Outlook for the week – 18 to 22.04.2016
( www.rupeedesk.in )
Stocks
of most capital goods companies are seen trading with a negative bias next week,
ahead of what is being viewed as another quarter of weak earnings.
In
the near term, stocks of product companies such as Voltas, Blue Star, and
Cummins are seen outperforming its peers in the project business. Not only are
project companies
such
as Larsen & Toubro, Bharat Heavy Electricals, and Thermax likely to
experience
execution
challenges and report a decline in the topline, order inflows are expected to
remain
tepid in two further quarters. Since capital misallocation takes time to
unwind, we see continued pressure on L&T over the near-to-medium term.