GOLDEN RULES FOR TRADING

Capital Goods Stocks Outlook for the week – 25 to 29.07.2016 (Seen range-bound on lack of triggers)

Capital Goods Stocks Outlook for the week – 25 to 29.07.2016
(Seen range-bound on lack of triggers)

Capital goods stocks are likely to trade within a range in the forthcoming week, with no major triggers in the short-term and weak Apr-Jun earnings outlook for companies in the sector. Most capital goods companies will detail their earnings for the June quarter in the last week of July and early August. Sector heavyweight Larsen & Toubro might see some stock-specific action next week on any development related to its 15% stake sale in subsidiary L&T Technology Services. We remain
concerned on LT's execution, order inflows and margin trajectory.

State-owned Bharat Heavy Electricals' order inflows in the segment are likely to remain flat-tonegative, according to the report. Cummins India, however, is expected to outperform over the
medium-to-long term as business fundamentals remain exceptionally strong.