Capital
Goods Stocks Outlook for the week – 23 to 27.05.2016
(Trade seen stock-specific; results
key)
( www.rupeedesk.in )
The shares of capital goods companies
is seen stock-specific next week as most major companies in the sector will detail their Jan-Mar
earnings during the week. Sector bellwether Larsen & Toubro will detail its earnings for the March
quarter on Wednesday, as will midcap majors Thermax and engines and generator manufacturer Cummins
India.
VA Tech Wabag will detail its
earnings on Thursday, while state-owned BEML and Bharat Electronics, and Avantha group's Crompton Greaves
will announce their results on Friday. Investors will be eyeing comments from
L&T's management on the outlook for the heavy engineering sector. The
company's own performance in terms of bottomline and operating margin has been
impacted by its shrinking capital goods order book as well as rising cost of
underutilised assets.
In the nine months ended December,
the company's operating margin for the heavy engineering segment fell to (-)2.2% from 11.9% in
the corresponding period a year ago. Revenue from the segment fell 14% on year to 20.9 bln
rupees in Apr-Dec.
