Budget effect on Sectors and Stocks

Hi All,

The Union Budget was announced on 26^th Feb. I have compiled the sectors which are impacted by the Budget and the Stocks in the Sector for which it would be an positive or negative effect.

Important Highlights of Budget:

·         Fiscal deficit for FY11 pegged at 5.5% of GDP; rolling targets of fiscal defict at 4.8% in FY12 and 4.1% in FY13

·         Inflation seen at 4.5% in both FY12 and FY13; 4% in FY11

·         GDP growth seen at 9% in FY13 and 8.5% in FY11

·         Divestment proceeds expected at Rs.40,000 cr in FY11

·         Expects Rs.35,000 crore from 3G auction

FERTILISER 

·         Nutrient based fertilsier pricing from 1^st April 2010

·         Subsidy to be given directly to farmer

Positive for:

Nagarjuna Fertilisers, Tata Chemicals, SPIC, Zuari Chemicals, Chambal Fertiliser.

AGRICULTURE

·           Extend Green Revolution to Eastern India; allocation of Rs.400 cr

·           Agriculture seeds get service tax exemption

·             5 more mega food parks projects to come up

 Positive for:

Jain Irrigation, Finolex, United Phosphorus, KSB Pumps, Nath seeds, Bayer Crop, Rallis

FMCG

·                  NREGA outlay hiked to Rs 40,100 cr ; employment   to  over 5 crore people

·                  Service Tax unchanged at 10% 

Positive for

HLL, DABUR, P&G, Marico

 POWER

·         Doubled the allocation for power sector

·          Set up Coal Regulatory Authority

·         Increased spending on rural development, means more power connections

 Positive for:

Siemens, REC, BHEL, Voltamp, NTPC, Reliance Power, Adani Power,NHPC

RAILWAYS

·                        Allocation to railway increased by Rs.9,500 crore 

 Positive for:

Kalindee Rail, Kernex, Texamaco, Titagarh Wagon

PSU BANKS

·         Farmer loan waiver period extended by 6 months  

·         Interest rate subvention  for farm loans hiked to 2%

·         Recapitalization of banks

                  

 Positive for:

 SBI, Dena,Bank, UCO Bank, Vijaya Bank, Andhra Bank, IDBI, PNB, UBI, CBI, Syndicate Bank, Dena Bank

INFRASTRUCTURE

·            Bharat Nirman FY11 plan outlay at Rs 48,000 crore

·            Corpus of Rural Infrastructure Development fund to be raised to Rs.61,000 cr.

·               Increased allocation for roads to Rs.19,894 cr

·               Rs.1.73 lakh cr allocated for infra development in the country

 Positive for:

Lanco Infra, GVK Power, GMR Infra, IRB, Mundra Port, Marg Construction, IVRCL Infra,IRB, HCC, L&T

EDUCATION

·                  Increased allocation for primary schooling

·                  Rs.3,675 cr grant on education to States

·                   FY11 education plan outlay at Rs 31,030 crore

Positive for:

Educomp, Edserv, Everonn, Core Projects

REALTY

·                  75% hike in urban development allocation

·                  Extension of 1% interest subsidy for low cost housing till 31^st March 2011

·                   Allocation for slum redevelopment increased to Rs 1,270 crore

Positive for:

DLF,JP Associates, Unitech, HDIL,HCC. Parsvnath, Omaxe

 WIND FARMS

·                  Exempt inputs used for making rotor blades

·                  5%waiver on additional excise on solar panels

Positive for:

 Suzlon

NBFCs

·            RBI mulling bank licences to NBFCs and private players    

Positive for:

Reliance Capital, Tata Capital, IFCI, IDFC

DEFENCE

• Increased outlay for defence will increased the demand for Defence related Equipments
• Defence spending at Rs 1.47 lakh cr

 Positive for:

BEL,BEML, Ashok Leyland, M&M, Astra Microwaves, L&T, Nelco

TOBACCO 

·                  Excise duty hiked

Negative For

 ITC

 JEWELLERY 

·                  Hike in custom duty of Rs 300 per 10 gram on gold from the current Rs 200

·                  Hike the customs duty on silver from the current Rs 1000 to Rs 1500 per kg

 Negative For:

 Gitanjali Gems, Rajesh Exports, Titan Industries

Positive For:

Shirpur Gold Refinery

 HOTELS

·                  Tax holiday for hotel industries 

 Positive For:

Indian Hotel, Hotel Leela, EI Hotels