Budget 2010 – Pragmatically progressive

The market’s rally post the budget reflects a realistic and progressive F2011 budget. The government is achieving fiscal consolidation program which is positive for earnings growth and market performance. The key risk factors in what seems to be a very strong growth environment are a combination of rising inflation and fragile risk appetite.

Yield curve flattening is likely more certain – the government’s market net borrowing is (more…)

Strength in JK Cement – Buy

J.K. Cement Ltd (JKCL) is a prominent cement player in North India (in top 6) and the second largest manufacturer of white cement in India after Grasim. JKCL is set to become a pan India player with its new cement capacity (3 mnT) in South. JKCL’s total cement capacity is likely to reach at 7.5 mnT in April’10 apart from 0.40 mnT of white cement. (more…)

Will the Finance Minister Hint at Reforms ?

Government as growth biased and one of the key premise of positive outlook on India is the restoration of Indian GDP growth to an 8-9% trajectory over next 12 to 15 months. The Indian parliament’s agenda for the current budget session (apart from discussing the union budget) seems to signal a strong intent to move ahead on the long outstanding reform agenda. The agenda includes 16 pending bills for consideration and passing (of these 10 to be taken up only in case standing committee reports are presented in time), and introduction of 63 new bills. (more…)

Railway Budget 2010 – Key Takeaways

Citing the need to support growth, the rail budget presented today: maintained status quo on passenger fares/freight tariffs, announced a token reduction of Rs100/wagon in freight charges for foodgrains and kerosene, and lowered service charges on e-ticketing.

The budget has targeted a 6% increase in freight loading to 944mt in FY11. Initiatives announced to help achieve this include (more…)

Markets Discounting Budget Views – Any Surprises ?

The Indian Markets have corrected pre-budget and are discounting the expectations that are likely to be met and reforms continuing without any drastic changes. BOFA-Merrill equity analysts write,

We think the budget to be presented on Feb 26th is unlikely to change the range-bound market view that we
have. We think the impact of the budget on the markets has been waning over the years since (more…)

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