BSE Capital Goods Falls 4%; Thermax, Apar, Astral Slide Up to 20%

Capital Goods Sell-Off Puts AI Sentiment and Earnings Under Scrutiny

A broad sector decline combined pressure from weaker quarterly signals at key companies with global concerns over the pace of AI investment.

A sector slump amid a stronger benchmark

The BSE Capital Goods index dropped to 68,566.49 in Friday’s intraday trade, at one point losing 4%. At 12:24 PM, it was down 3.3% and was the weakest among sectoral indices, while the Sensex was up 0.84%. That divergence suggests the selling was concentrated in capital goods rather than reflecting an equally broad decline across the market.

Thermax fell as much as 20% to ₹2,670. Astral and Apar Industries each declined 12%, while CG Power and Industrial Solutions lost 9% and Data Patterns India fell 8%. Several other names, including GE Vernova T&D India, Supreme Industries and Bharat Dynamics, were down 5–6%. These were intraday moves, not closing prices.

Global AI concerns added to the pressure

US markets ended sharply lower on Thursday, with technology and semiconductor shares leading losses as investors reassessed the outlook for the AI investment boom. The Nasdaq fell 5.6%. The market concern highlighted in the source was a possible slowdown in data-centre spending, amid opposition from Democrats to large-scale data-centre investment.

Geojit Investments’ chief investment strategist said the US sell-off could affect other markets, while suggesting India may be less exposed and that a deceleration in the AI trade could benefit the country. That is an analyst view, not a settled market outcome. The connection matters because sentiment around AI-linked businesses can influence how investors value companies perceived to be exposed to the investment cycle, even when their quarterly results are also an immediate trigger.

Results sharpened scrutiny of execution and margins

Thermax’s profit after tax fell 5% year on year. Order inflows of ₹3,259 crore were below the ₹3,720 crore estimate cited by JM Financial Institutional Securities, with weakness in Industrial Products described as a negative surprise. The brokerage also noted that the company’s EBIT margin declined to 6.5% and said it was awaiting management commentary on order inflows and the FY27 margin outlook.

Astral’s consolidated EBITDA rose 1% year on year and 13% quarter on quarter to ₹260 crore, but EBITDA per kilogram fell 10% year on year and 12% sequentially to ₹31. Higher polymer prices in Q2FY27 were passed on to customers only in Q3, creating near-term margin pressure. Management maintained its FY27 plumbing guidance of double-digit volume growth and a 16–18% EBITDA margin. JM Financial lowered its target multiple and cut FY27 and FY29 EPS estimates by 3–4%, citing Q2 performance and PVC-price volatility.

What investors should watch next

The sell-off brings two separate questions into focus: whether global doubts about AI spending persist, and whether company-level order growth and margins recover. The strategist also cited foreign institutional investor purchases of ₹35,781 crore over the previous five trading sessions, despite domestic institutional selling and profit booking, and argued that this could support market resilience. It does not, however, remove the need to assess individual earnings and valuations.

Key Highlights

• The BSE Capital Goods index fell as much as 4% intraday, even as the Sensex gained at the 12:24 PM snapshot.
• Thermax, Astral and Apar Industries were among the steepest decliners, with intraday losses of up to 20%.
• Thermax’s ₹3,259 crore order inflow missed the ₹3,720 crore estimate cited by JM Financial.
• Astral’s EBITDA grew, but lower EBITDA per kilogram reflected near-term polymer-cost pressure.
• US technology losses and debate over data-centre investment added a global sentiment risk.

Investor Note: The sharp intraday declines reflect both earnings-related concerns and broader uncertainty around AI investment sentiment. Investors may want to track management commentary, order inflows and margin trends alongside global signals, rather than treating the sector-wide fall as evidence that every company faces the same outlook.