March, 2008 | Dalal Street

Equity Research

Budget 2009 – Sectoral Views

March 1, 20083 min read

We have covered some immediate views about the Budget here – Part-1, and Part-2.

We are now analyzing the impact of Budget-09 on each and every Individual Sector of the Indian Economy.

Automobile:
Overall Expected Budget Impact: Positive
Reduction in Cenvat to be applicable for Commercial vehicles (trucks, light vehicles) can be retained to absorb increase in raw material prices – Positive for Tata Motors and Ashok Leyland.

Reduction in Excise duty for small cars, two and three wheelers, buses and bus body chassis to be largely passed on, but could result in higher demand – Positive for Maruti, Bajaj Auto, TVS Motors and Hero Honda in that order (more…)

Breaking Corporate India Earnings News

Budget 2009 – First Look

March 1, 20082 min read

Short Term Capital Gains:The increase in Short Term Capital Gains tax (STCG) and the indirect increase in Securities Transaction Tax (STT) will disappoint the markets, in our view. On the positive side, the Finance Minister has succeeded in more than meeting his fiscal deficit targets and has forecast a fiscal deficit of only 2.5% of GDP for next year.

Waiver of farm loans – Indian Sub-prime:
The Finance Minister has announced a waiver and a one-time settlement of agricultural loans that will lead to a write-off of loans upto Rs600 bn. While details are still not clear, the Government has said that they will compensate the banks fully for these write-offs.

Autos – gain with excise duty cuts and personal Income tax cuts Autos will gain in the budget with a decrease in excise duty by 4% on small cars, 2-wheelers, buses and CVs. Also, helping autos would be lowering of personal taxes and the impact of the likely announcement of the Pay Commission impact.

Holding companies gain – Double Dividend Taxation set-off
Holding companies can now claim set-off of dividend taxes paid on dividend received by their subsidiaries. This should help companies like Jaiprakash which have presently many SPVs (and in future helps companies like Gammon, L&T etc) as well as finance companies like ICICI, HDFC.

Economy, Markets and Macro Views

ITC – Excise Hike Steeper Than Expected

March 1, 20081 min read

In 2008-09 budget, excise duty on non-filter cigarettes has been increased – for non filter plains, excise has gone up from Rs0.562/stick to Rs1.323/stick, whereas that for micros has gone up from Rs0.168/stick to Rs0.819/stick. Excise on filter cigarettes has not been increased; however, the overall weighted excise duty increase for ITC works out to 16%.

Micros and plains constitute 20% of ITC’s revenues. (more…)

Breaking Corporate India Earnings News

Nothing major for IT sector in India budget

March 1, 20081 min read

Our Analysts have worked really hard to Digest the outcome of Budget and we are summarizing in a series of posts. To begin with, no major developments for the Indian IT sector out of the proposed India budget. Specifically, the most material element that had been debated was the possibility of an extension on the Software Technology Park (STP) tax holiday, which is set to expire in fiscal 2010. From a longer-tem perspective, we view the increased allocations on education spending and proposed college campus build-outs as a positive for the industry as it helps support the continued growth of India’s labor capacity.

With India’s fiscal 2009 budget behind us, we do not expect much in the way of near-term catalysts. At this point we are left exposed to broader macro trends and sentiment, and await the FY2009 guidance period in April from all the Major IT companies.

« Prev 1 … 7 8 9