Budget effect on Sectors and Stocks

By | February 27, 2010

Hi All,
The Union Budget was announced on 26th 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 1st 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 31st 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

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