Nivesh Post Budget Review _2013-14
Transcript of Nivesh Post Budget Review _2013-14
-
7/27/2019 Nivesh Post Budget Review _2013-14
1/20
IndiaNiveshSecurities
Private
Limited
email:[email protected] | Website:www.indianivesh.in
IndiaNiveshResearch February2013
-
7/27/2019 Nivesh Post Budget Review _2013-14
2/20
MACROVIEWNoIm etustoeconom rovided ano ortunit lost
FY14 budget turned into a damp squib with no measures announced that can provide impetus to economy.
In our view budget was probably made with one eye on general elections in near term & the other on
somehow avoid any potential downgrade from rating agencies due to slipping of fiscal deficit target. With
sleight of hand & smart window dressing the fiscal deficit number is shown as better than street estimates.
However, like last year, the credibility of these numbers will come under scanner.
Credibility an issue:
.
Following points corroborate this fact:
a) Revenues have been inflated with highly optimistic assumption on growth in GDP at 13.8% (nominal
terms) in FY14. This number does not tally with any of the estimates provided till date including those
rom governmen agenc es. ven e mos op m s c es ma e rom conom c urvey sugges s ea
terms GDP growth of 6.1 to 6.5% & inflation of ~6% in next year. Hence we do not understand how will
this growth come? Also no concrete measures have been announced for reviving capex/investment
cycle.
b) Based on strong growth in GDP, the government expects tax revenue to grow @18% over FY13. At the
time when most of the corporate are struggling to sustain, services sector under pressure, such a high
growth in tax revenue seems to be challenging.
c) The FM has assumed Rs 400bn from disinvestment & ~140bn from sales of residual stake of
government in companies like SUTTI, Balco etc. Telecom sector by way of spectrum fee/one timecharge & other levies is likely to contribute another Rs 400bn. Sale from assets is marred with many
IndiaNiveshResearch February28,2013|2PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
3/20
(contd)
legal complications as many government departments are involved. Also the anomaly is Balco
promoters themselves were willing to offer Rs 170bn for Balco/HZL which the government has not
done anything about but they want to include that in FY14 calculations. As regards revenue from
Telecom sector, in FY13, we have seen how auctions have failed miserably & contributed only Rs 10bn
v/s estimated Rs 200bn. Thus there is a clear case of being over optimistic on non tax revenue.
d) On the expenses side, as in the last year, there is a tendency to depress expenditure on subsidies.
While the subsidy on account of food has been increased from RE FY13 Rs 850bn to Rs 900bn for
FY14BE, amounts on fertilizer has been maintained at same level of FY13 & that of OIL subsidy has
been actually estimated to be lower from Rs ~970bn to Rs 650bn. This can happen only in 2 cases
either the fuel prices at retail level are increased so substantially that there is small subsidyrequirement or International crude prices come down significantly. Going by global economic situation
we do not expect any material drop in oil prices. In election year FY14, to expect substantial increase
in retail level fuel prices also does not seem to be prudent. Thus we expect a miss on subsidy bill in
FY14 too. It can only be met by way of deferring some subsidy payments to next year.
Populist measures with an eye on elections
1. Increase target for agriculture credit from Rs 5750bn to 7000bn (an increase of ~22%). This is a means
of providing incentive to rural population in penultimate year of election by the incumbent
government.
2. Outlay on rural development & social schemes has been increased by 46% over FY13RE. Allocations to
all social schemes have been significantly increased.
IndiaNiveshResearch February28,2013|3PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
4/20
(contd)
3. Allocation of Rs 90bn made for Food Security Bill (this is when even the bill is not yet out, FM himself
does not know what is there in the bill).
4. Refinance from SIDBI to micro finance institutes .
Prudent measures taken:1. Made RGESS more investor friendly & increased threshold limit for eligibility for this scheme.
. rov e ex ra ax ene o s . mn over a ove curren s . mn on n eres or rs me ome
loan takers for buying house worth less than Rs 2.5 mn.
3. Enhance penetration of insurance by opening branches of LIC & encouraging other insurers to do thesame in smaller towns.
4. Tweak STT rates favorably for equity markets, make FII investments easier in debt instruments, ETF etc.
5. Enhance limit for raising money through tax free bonds by eligible institutions.
1. We were expecting some path for revival of capex cycle, which according to us is most important to
reach GDP growth target. There is no announcement on this. FM has sounded CAD is a matter of
bigger concern than FD, but there is no announcement that will address this issue. This is the reason
we erme s u ge as was e oppor un y.
IndiaNiveshResearch February28,2013|4PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
5/20
(contd)
2. Increase surcharge on high income tax payers & companies with PAT of above Rs 100mn. These kind of
discriminatory taxes distort the concept of equitable distribution of wealth & also lead to more tax
evasion. Although in this case since the surcharge is small amount for the ultra rich individuals, it may
. .
& for other in nominal tax bracket it will go up by 1.55%.
3. Pressurizing banks to lend more towards agri side when already most of the PSB are saddled with hugeNPA burden. Also bringing Private Banks in interest subvention scheme for farm loans may put asset
ualit of Private Banks under stress.
4. Ambiguity regarding taxation of investors coming from tax haven areas where DTAA is applicable. New
addition to IT act, regarding Residency Certificate alone is not sufficient, was a major disappointment
& has potential to result in similar kind of capitulation as we witnessed last year post implementationof GAAR.
Conclusion: Going by the reputation of FM being market friendly & pro reforms markets were expecting some directionalmoves that could revive growth. Post the series of measures announced since September 2012 hopes were raised even morethat reforms will now resurface. However, unfortunately most of these hopes have been belied thus resulting indisappointment. We believe budget will not be able to provide any support to the markets & in case of any pressure coming
rom international li uidit reducin or dr in u our markets ma witness shar downward reaction.With budget out of the way, we expect markets will come back to basic fundamentals in a short time. Earnings growth hasto revive to bring cheer back to markets. Our stand that markets are over optimistic in the first two months & FY14 earningsdowngrades have to follow seem to be strengthening. In view of continued subdued macro picture hopes of any materialrate cuts may get deferred a little longer. We remain cautiously optimistic on overall markets & continue with stock specificapproach in line with our view given in the beginning of current calendar.
nce s u ge was more ocuse o macro ac ors ere s no muc mpac on m cro sec or. ever e ess ensu ng pages
contain our understanding of various provisions of budget & respective impact on specific sectors & stocks within. Most ofthe sectors are marked as neutral either due to no significant action or due to in line with expectation budget proposals.
IndiaNiveshResearch February28,2013|5PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
6/20
AUTOMOBILES
BUDGET IMPACT: NEGATIVE (Sector ignored by the policy makers)
Budget 201314 disappointed automobile sector. Though this disappointment was not as much as it was last year
but it was clearly ignored by the policy makers. Especially now when the sector is going through rough time (less
than 5% growth in 9m FY13) it was expecting some relief in terms of export soaps, reduction in excise duty, higher
depreciation allowance, deduction for R&D expenses, etc. Automobile sector is a job multiplier sector. Apart from
OEMs, auto component industry, motor insurance industry and other related industries provide millions of job
opportunities; therefore it is an important sector to focus and give incentive to flourish not only in domestic market
u a so o e compe ve rom expor po n o v ew.
Issue Proposal Impact
PurchaseofbusesunderJNNURM(JawaharlalNehruNationalUrban Upto10,000busestobepurchased
Positive forTATAMotors,AshokLeylandandEicherMotorswhich
RenewalMission) .
Excie dutyhikeonSUVs(vehiclelength
exceeding4000mm&havingground
clearanceof170mm&above)except
thoseareusedastaxis
Increasedfrom27%to30%
SlightlyNegative forMaruti,TataMotorsandM&M.Inpercentage
termtheextramoneyacustomerhastopayoutwillbe2.3%.We
believecompanieswillpassonthistobuyers.
Importdutyhikeoncars&bikes
75%to100%andmotorcyclesabove
800ccthedutyhasgoneupfrom
60%to75%.
Negative forTataMotors(Jaguarmodelsareimported)andM&M
(Rexton inimported).
Periodofconcessionavailablefor
Periodofconcessionavailablefor
specifiedpartofelectric/hybridPositive for M&M Reva
specifiedpartofelectric hybrid vehiclesextendedupto31.03.2015
Source:BudgetDocuments;IndiaNiveshResearchIndiaNiveshResearch February28,2013|6PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
7/20
BANKING&FINANCIALSERVICES
BUDGET IMPACT: NEUTRAL (Lacks direction)
Budget Developments
Union Budget for FY13 was more of neutral to Banking Services & some what positive for Insurance & Financial services industry. Key budget
announcements include higher credit allocation towards Agrisegment, increase in interest part of tax exemption for first time home buyers,
banks allowed to act as insurance brokers. One positive for banking sector was announcement on recapitalization of Public Sector Banks
(PSBs) to the extent of Rs 140 bn. Further, Insurance companies can now open branches anywhere in India without the permission of IRDA.
Also lowerin of STT extension of Ra iv Gandhi E uit Savin s Scheme are ositives for the brokin sector.
Issues Proposal Companies Impacted
Capitalization Allocate Rs 140 bn for PSBs to ensure they are
Basel III complaint
Positive: for PSBs, probably SBI, PNB, BOI, UBI
Increase in tax deduction
interest component
Add. Deduction of Rs 0.1 mn for a person taking
home loan (up to Rs 2.5 mn) during 1.4.2013 to
31.3.2014
Positive: Benefit all Banks & NBFCs, esp. Housing Finance
Companies like GIC Housing Finance & LIC Housing Finance
Agriculture credit Increase Agricredit target to Rs 7,000 bn for Negative: for all banks (esp. PSBs); Private banks ICICI, Kotak
FY14E; Extend interestsubvention scheme, short
term crop loans now to private sector banks too
would now be exposed to Agrilending and now their NPAs
may increase
Banksasinsurance
brokers
Banks are allowed to act as Insurance brokers Positive: to benefit all banks, as being insurance broker,
other income of the banks would benefit
IndiaNiveshResearch February28,2013|7PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
8/20
BANKING&FINANCIALSERVICES(contd)
Issues Proposal Companies Impacted
Tax Free bonds Tax free bonds amount of Rs 500 bn, will benefit
companies which are majorly into infra finance
Positive: for IFCs like IDFC, PFC & REC
Commodities Transaction
Tax (CTT)
Introduce CTT on nonagricultural commodities Negative: for companies like MCX, FT
Cut down the Securities
Transaction Tax (STT)
Reduce STT (Equity futures/ MF/ ETF redemption/
purchase/ sale transactions to 0.01%)
Positive: for companies like Religare, Edelweiss, IIFL
SIDBI to refinance Micro
Finance loans; Rs 1 bn
allocation to India
Microfinance Equity Fund
Refinancing capacity of SIDBI has been increased
to Rs 100 bn; Also, Rs 1 bn of allocation have been
made towards India Microfinance Equity Fund
Positive: for Microfinancing institutions like SKS
Rajiv Gandhi Equity
Savings Scheme (RGESS)
extended
RGESS gets liberalized (now first time investor can
invest in mutual funds, also this benefit can be
extended now to 3 years, income limit raised to Rs
1.2 bn)
Positive: for listed Stockbrokers such as Religare, Emkay,
Edelweiss, IIFL, Geojit
Source:BudgetDocuments;IndiaNiveshResearch
Opening of branches by
Insurance Companies
Now Insurance companies are free to open their
branches without IRDA permission
Positive: for Insurance players such as Max India
IndiaNiveshResearch February28,2013|8PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
9/20
CAPITALGOODS
BUDGET IMPACT: NEUTRAL (Below expectations as no major reforms announced)Within CapGoods segment, street was looking forward to update on power sector developments and any initiatives
which would lead to revival in capex cycle. However, there were a major disappointment, as there we no
.
allocation are Defense Services & Water Purification. Also, there were a few smaller announcement related to Urban
Infra & Ship Building sectors. Higher Road & Highways spending in FY14E in our view would lead to increase indemand for Construction Equipments.
Proposal Impact on Sector CompaniesImpacted
42.3%increaseindefense Capitaloutlay(Heavy
&MediumVehicles +OtherEquipment)
Should help growth prospects of PSUs & Army
Vehicle manufacturers
Positive: BEL, BEML, Pipavav , Tata Motors
amongst other private players
Ships&VesselstobeexemptedfromExcise
Dut No CVD on im orted shi s & vessels
Beneficial to the Shipbuilding sector Positive: L&T, Pipavav, Tata Motors amongst
others
HigherallocationtowardsRoads&Highways
vertical
Beneficial for Road Equipment players, who are
impacted due to slowdown in demand
Positive: Gujarat Apollo, Action Construction
Equipment, BEML amongst others
Those investin over Rs 1 bn towards lant and This incentive would lead to hi her rofits for Positive: BHEL and those com anies willinmachinery during 01042013 to 31032015,
would be eligible to deduct 15% of investment
done as investment allowance
those making investments now (also life of the
plant in the books would get increased)
to invest, however timeline is too short to
initiate a project
Rs 14 bn allocation towards Water Purification
Plants
To benefit smaller ticket sized water purifiers Positive: Va Tech Wabag & other private
players
Source:BudgetDocuments;IndiaNiveshResearch
IndiaNiveshResearch February28,2013|9PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
10/20
CEMENT
BUDGET IMPACT: NEUTRAL (Provided rural demand picksup)
Budget Developments
next 12 years. Despite the current market dynamics, the cement price has been reeling high on expectations of
demand revival. On the back of increase in allocation towards rural housing & Roads & Highways vertical, when
coupled with elections due in 2014, strengthens our view that demand would revive and support higher prices.
Proposal Impact on Sector Companies Impacted
36% increase in allocation towards hi h cement Should lead to revival in demand Positive: All cement com anies would be
, ,
cement players, those with captive power plants (such as ACC, Ambuja, Ultratech and JP Associates). On a whole, we
do not expect much impact on the profitability of frontline cement companies.
consumption areas, such as Irrigation (148.7%),
Roads & Highways (35.5%)
benefitted
Customs & CVD on steam coal increased to 2%
from 0% and 1%, respectively; for bituminous
Increase of duty on Steam coal (used for
cement production) would almost nullify the
Neutral: ACC, Ambuja, Ultratech, and JP
Associates
from 5% & 6%, respectively bituminous coal (for captive power plants)
Enhance allocation towards Rural Housing Fund
from Rs 40 bn to Rs 60 bn
Should drive demand for rural housing and
lead to increase in cement consumption
Positive: Cement majors along with regional
cement players such as JK Lakshmi Cement
Ltd, Shree Cements, etc.
Increase in tax rate on ro alt & technical To im act net mar in of com anies with non Ne ative: For ACC & Ambu a
services fees for nonresident parent companyfrom 10% to 25%
Indian parent companies, such as, Heidelbergetc.
Source:Budgetdocuments,IndiaNiveshResearchIndiaNiveshResearch February28,2013|10PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
11/20
FMCG
BUDGET IMPACT: POSITIVE (Rural consumption to boost revenue growth...)
Relative to other key sectors the Union Budget 201314 had a few positive surprises for FMCG pack, except
increase in excise duty on cigarettes. The high doubledigit increase in agriculture credit and various rural
employment generating schemes could lead to increase in rural disposable income. We believe this should
strengthen rural consumption story, which remained the key driver for FMCG sector for past few years.Hence, we believe, budget should be a volume booster for FMCG sector going ahead.
Issues Proposal Companies Impacted
Specific Items Excise Duty
Cigarettes Excise duty increased by about 18% Negative : ITC,VSTInds,Godfrey
PhillipsSpecific Items Customs Duty
Peanut Butter Exempted from basic customs duty Positive: Agro Tech Foods Ltd.
Rural Development Scheme : NREGA/PMGSY 13%/2.3% yoy growth in NREGA/PMGSY programme
would lead to an increase in disposable income and
strengthen consumption story (largely driven by the
rural areas).
Positive : Entire FMCG sector
Agriculture Credit 22% increase in credit flow to agriculture sector to
Rs.7,000 bn
Positive : Entire FMCG sector
Tax Rate Increase in tax rate on royalty & technical services
fee to nonresident parent company from 10% to
Neutral : Entire FMCG sector
Source:BudgetDocuments;IndiaNiveshResearch
IndiaNiveshResearch February28,2013|11PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
12/20
INFRASTRUCTURE
BUDGET IMPACT: NEUTRAL (But a lot could have been done)
Budget Developments
Apart from addressing broader Infra verticals, FM picked up Roads & Highways, Urban Infra verticals and announced
higher spending plans (on back of 2014 elections). In road sector, instead of addressing structural issues (delays in
getting clearances & financing woes), FM announced setting up of a regulatory body for Roads & Highways sector,
which would in our view would be ainful for Infra la ers in the near term but ood for the lon term
Proposal Impact on Sector Companies Impacted
29.6%increaseinNHAIallocationtoRs375bn
forFY14E;BuildroadsinNE;3,000kmsofroad
Road subsector which witnessed slowdown in
award activity should see some revival
Positive: ITNL, Sadbhav Eng, IRB Infra,
Ashoka Buildcon, MBL Infra, J Kumar Infra
Regulator for Roads & Highways vertical Would address issues such as tariff setting,
service quality levels, assess concessionaire
claims, servicelevel benchmarking , etc. (near
term ne ative but lon term ositive
Positive: ITNL, Sadbhav Eng, IRB Infra,
Ashoka Buildcon, MBL Infra
Raise Rs 500 bn Tax free bonds towards financing
of Infra. projects
Should address funding foes of Infra players up
to certain extent
Positive: ITNL, IRB, GMR, GVK, Sadbhav,
amongst others
Rs 9,116 bn spending towards Irrigation projects Positive for Irrigation EPC players, but remain Positive: IVRCL, NCC, Ramky Infra
concerned about actual execution
Source:BudgetDocuments,IndiaNiveshResearch
IndiaNiveshResearch February28,2013|12PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
13/20
-
7/27/2019 Nivesh Post Budget Review _2013-14
14/20
OIL&GAS
BUDGET IMPACT: NEUTRAL (Besides no clarity on subsidy sharing mechanism and pricing of natural gasone more ambiguity added in E&P side)
Overall budget impact on the sector is Neutral with respect to any new proposals; however, it is negative with
respect to key prebudget expectations. There was a disappointment towards 1 Extension o tax holidays or
refineries 2) clarity on the subsidy sharing mechanism and natural gas prices. The government has allocated
budgetary support of Rs 650 bn towards petroleum subsidy in 1314 on hope that partial deregulation of oilproduction will led to lower underrecovery (that is significantly lower than of revised budget estimates 1213
Issues Proposal ImpactUnder the current system, the oil firms first recover their costs from
. . .
impact on companies like Cairn India, RIL and other upstream companies. However some positive
announcement made towards the reviewing pricing of natural gas that is already known in the street.
Movetowardsa
revenuesharingmodel
Oil and gas exploration contracts will now be awarded on a revenue
sharing basis, shifting from the current profitsharing
sa es o o an gas an en s are pro s w e ov . er e
change in system govt. will start getting its share with the start of
production in the field irrespective of the cost recover . Negative for
RIL, Cairn India and other upstream companies.
Reviewon
natural
gas
The pricing of natural gas will be reviewed so as to remove the
Positive : If gas prices are hiked, it will promote further investment in
gas sector and will be positive for upstream companies like, ONGC.
Oil India , Cairn and RIL. There will be negative impact on
pricehike uncertainties on the issuepe roc em ca us nesses o u wou o se y ncrease n
volume of natural gas.
It will adversely impact the financial prospects of end users,
especially power and fertilizer sector
Extend the tax holiday
to natural gas sectorand
refineries
No announcement made Neutral for OMCs and upstream companies RIL
Policyregarding
shale
gasA policy to encourage exploration and production of shale gas will beannounced.
Positive It will reduce dependence on oil and gas imports
Source:BudgetDocuments;IndiaNiveshResearchIndiaNiveshResearch February28,2013|14PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
15/20
PHARMA
BUDGET IMPACT : NEUTRAL
There was no specific announcement for pharma sector in Budget 201314 except few small ones. On the
line of NRHM (National Rural Health Mission) government announced NUHM (National Urban Health
ss on n e prev ous year s u ge sess on, w c s e y o e mp emen e rom curren year onwar s.
Despite, extension of healthcare scheme from rural regions to urban region, overall allocation to New
National Health Mission (NRHM+NUHM) increased only 2% yoy to Rs 212 bn in FY14E. Other than that,Finance Ministry allocated Rs 16.5 billion for six AIIMS like Institutes & Rs 10.7 billion for AYUSH. Hence, total
,
Rs 305 billion allocated in the starting of previous budget session and than revised downward to Rs 249
billion currently, for FY13E.
We dont anticipate any direct impact on healthcare & pharma sector from the current budget.
Issues Industrywishlist Ourexpectation Budget Outcome Impact
MAT exemption
from SEZCould exempt from MAT to all
manufacturing units in SEZ to
promote investments & exports.
Unlikely Inlinewithourview. No Impact.
Customsduty at the same level.
.
SubInfrastructure
status
In order to meet challenges &
attract investment, government may
Unlikely Inline withourexpectations. No impact.
Source:BudgetDocuments;IndiaNiveshResearchinfrastructure status to Healthcare.
IndiaNiveshResearch February28,2013|15PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
16/20
POWER
BUDGET IMPACT: POSITIVE (Fuelled with small positive but major reforms still pending)
The Budget was positive for the Power sector. As expected, tax holiday under Section 80IA was extended by
one more year till March 2014. To meet the fuel requirement for power the govt. proposed to encourage
Publicprivatepartnership (PPP) model to raise coal production. Further reduction in duty on Bituminous coal
is the positive for the company which have high exposure on imported coal.
Issues Proposal Impactofourexpectation
Tax holiday under section 80IA for power projects extended from Positive Extension will benefit the companies which are
Extension of 80 IA benefit 31.3.2013 to 31.3.2014. commissioning plants after March2013, such as R Power,
CESC, NTPC, Adani Power, JSW Energy etc.
Duties on Steam Coal and Bituminous
Coal equalized
Duties on Steam Coal and Bituminous Coal equalized and 2 percent
custom duty and 2 percent CVD levied on both kinds coal.Positive As bituminous coal is highly used for power
generation and reduction in duty is positive for Adani
Power, Tata Power and JSW energy.
PPPpolicyframeworkwithCoalIndia
Publicprivatepartnership (PPP) model should be followed to raise
coal production. Govt. proposed a PPP policy framework with Coal
India Ltd as one of the partners in order to increase production to
supply to power producers and other consumers
Positive for sector as a whole
Changeinpolicypertaining
to im orted fuelbased ro ects
No announcement madeNegative
for Tata Power, R Power and Adani Power
Restructuring planofSEBs
State Government urged to prepare the financial restructuring plan,
quickly sign MoU and take advantage of the schemeNeutral: No announcement made regarding Budgetary
allocation of fund to SEBs for restructuring their debt
Reintroducegenerationbased The govt. will provide Rs. 8 bn to the ministry of new and renewablePositive for Tata power and Suzlon
ncen ves orw n energypro ec .
Source:BudgetDocuments;IndiaNiveshResearchIndiaNiveshResearch February28,2013|16PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
17/20
REALESTATE
BUDGET IMPACT: NEGATIVE (Negative news flow continues)
Budget Developments
Residential Real Estate markets across the country has been witnessing slowdown. With weaker balance sheets, and
current challenging macroenvironment, sector on a whole was looking towards budget with lots of expectations.
Levy of 1% TDS on transfer of Immovable Property, which was rolled back in May2012 has been again proposed.
Also, extension of interest subvention scheme has not been made. The only respite amongst these negatives have
Proposal Impact on Sector Companies Impacted
Levy of 1% TDS on transfer of ImmovableProperty with value of more than Rs 5 mn
Should lead to an increase in the transaction costs Negative: All Real Estate companies wouldbe impacted
een ncrease n tax e uct on nterest component o an n v ua s ng to s . mn.
(other than Agri. Land)
Increase on excise duty on marble from Rs
30/sq.m to Rs 60/sq.m
Should lead to increase in costs Negative: All Real Estate companies to be
impacted
Increase in tax deduction interest Residential home buyers may get benefited & Positive: Ackruti, Vascon, Parsvnath, HDIL
. .
for housing loans taken in FY14 (provided
loan value is less than Rs 2.5 mn)
increase in demand
Rate of abatement reduced from 75% to 70%
for flats with carpet area of 2,000 sft or
Should lead to increase in total cost of flats Negative: Premium Developers (DLF,
Unitech) & TierI city Developers (Oberoi
. .
with high component of services)
,
Source:Budgetdocuments,IndiaNiveshResearchIndiaNiveshResearch February28,2013|17PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
18/20
TELECOM/MEDIA
BUDGET IMPACT: NEUTRAL (Regulatory constrains remain)
As expected Union Budget 201314 turned out be a nonevent for Telecom sector. Increase in custom duty on Set
To Boxes remains ne ative for DTH service roviders. However increase in the excise dut on mobile hone set
costing more than Rs.2,000 should not put any strain on the pockets of telcos (passed on to the consumer). Parallel
to the last budget government has pencilled in ~Rs.400 bn revenue from the upcoming 2G spectrum auction. This
illustrates that market expectation of softening in regulatory hurdles is a false assumption. There is no doubt that
sector has potential with 34% of rural teledensity & enormous opportunity for the 2G/3G data expansion.
, .
few pending regulatory issues during the announcement of Spectrum Enactment Act.
Issues Proposal Companies Impacted
, , ,
Tata Sky etc
ExciseDuty For mobile phones priced at more than Rs.2000 excise duty is
increased from 1% to 6%. However, we expect this to be passed on to
Neutral: BHARTI,IDEA,RCOMetc
.
Source:BudgetDocuments;IndiaNiveshResearch
IndiaNiveshResearch February28,2013|18PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
19/20
RESEARCHTEAM
DaljeetS.Kohli
HeadofResearch
Mobile:+917738393371,9920594087
Tel:+912266188826
AmarMourya
ResearchAnalyst
Tel:+912266188836
Y.Santosh
ResearchAnalyst
Mobile:+917738393416
Tel: +912266188840
AbhishekJain
ResearchAnalyst
Mobile:+917738393433
Tel: +912266188832
abhishek. [email protected]
BhagwanSinghChaudhary
ResearchAssociate
Mobile:+917738393427
Tel: +912266188835
. .
SumanthMuvvala
AssociateAnalyst
Mobile:+917738393414
Tel: +912266188839
. .
IndiaNiveshResearch February28,2013|19PostBudgetReview201314
-
7/27/2019 Nivesh Post Budget Review _2013-14
20/20
DISCLAIMER
ThankYou
IndiaNiveshSecurities
Private
Limited
601&602,SukhSa ar,N.S.PatkarMar ,
GirgaumChowpatty,Mumbai400007.
Tel:(022)66188800/Fax:(022)66188899
email:[email protected] | Website:www.indianivesh.in
This document has been prepared by IndiaNivesh Securities Private Limited (IndiaNivesh), for use by the recipient as information only and is not for
circulation or public distribution. This document is not to be reproduced, copied, redistributed or published or made available to others, in whole or in part
without prior permission from us. This document is not to be construed as an offer to sell or the solicitation of an offer to buy any security. Recipients of this
document should be aware that past performance is not necessarily a guide for future performance and price and value of investments can go up or down.
The suitability or otherwise of any investments will depend upon the recipients particular circumstances. The information contained in this document has
been obtained from sources that are considered as reliable though its accuracy or completeness has not been verified by IndiaNivesh independently and
cannot be guaranteed. Neither IndiaNivesh nor any of its affiliates, its directors or its employees accepts any responsibility or whatever nature for the
information, statements and opinion given, made available or expressed herein or for any omission or for any liability arising from the use of this document.
Opinions expressed are our current opinions as of the date appearing on this material only. IndiaNivesh directors and its clients may have holdings in the
stocks mentioned in the report. IndiaNivesh directors and its clients may have holdings in the stocks mentioned in the report.
IndiaNivesh Research February 28 2013 | 20Post Budget Review 201314