Following are the post-budget top 15 picks for year 2011 by broking firm Anand Rathi Share & Stock Brokers::
> Gujarat State Fertilizers & Chemicals (GSFC): 1 year target - Rs 590
> Tinplate Company of India: 1 year target - Rs 120
> Development Credit Bank (DCB): 1 year target - Rs 75
> Sun TV Network: 1 year target - Rs 700
> ABG Shipyard: 1 year target - Rs 600
> Petronet LNG: 1 year target - Rs 160
> Hindustan Unilever: 1 year target - Rs 400
> Arvind: 1 year target - Rs 85
> HCL Infosystems: 1 year target - Rs 145
> PTC: 1 year target - Rs 130
> BEML: 1 year target - Rs 950
> Grasim: 1 year target - Rs 3,200
> Indiabulls Real Estate: 1 year target - Rs 155
> Rural Electrification Corporation (REC): 1 year target - Rs 310
> Educomp Solutions: 1 year target - Rs 610
Following is the snapshot of key sectoral announcements made in the budget 2011 and key beneficiary companies analyzed by the broking firm::
1) Sector- Fertilizers:
Measure
Government is likely to consider urea under nutrient based subsidy (NBS) policy
Direct transfer of cash subsidy.
To treat capital expenditure in fertilizers as infrastructure capex.
Key Beneficiaries - GSFC, Coromandel International, Nagarjuna Fertilizers, Deepak Fertilizers
2) Sector -Shipping:
Measure
Exemption from import duty for spares and capital goods required for ship repair units extended to import by ship owners
Key Beneficiaries - GE Shipping, Shipping Corp, ABG Shipyard
3) Sector -Infra and Capital Goods:
Measure
Allocation of Rs 2,140 billion for infrastructure development
Allowed additional tax free bonds of `300 billion for expansion of highways, railways, ports and residential complexes
FII limit for investment in corporate bonds issued by infrastructure companies raised by USD 20 billion, taking the total limit to USD 25 billion and FIIs would also be permitted to invest in unlisted infrastructure bonds with a minimum lock-in period of three years.
To come up with a comprehensive policy that can be used in further development of public-private partnerships (PPP)
Key Beneficiaries - IRB Infra, REC
4) Sector - FMCG:
Measure
Crude Palm Stearin fully exempted from basic customs duty for use in manufacture of laundry soap helps reduce manufacturing cost in a scenario of high raw material cost inflation.
Increase in IT exemption limit/ higher spends under NREGA translates into higher disposable income positive for the sector.
Not touched tax on tobacco which was expected in Budget.
Key Beneficiaries - Hindustan Unilever, ITC, Colgate
5) Sector Banking and Finance:
Measure
Enhanced limits for housing loans qualifying for priority sector exposures would act as an incentive for flow of resources to the affordable housing segment.
Positive for the banking industry with proposed capital infusion to enable banks strengthen their capital adequacy levels and fund expansion of operations.
Extension of the additional deduction of Rs 20,000 to investments made by individuals in infrastructure bonds for one more year - positive for NBFCs.
Interest rate subvention of 1% extended to housing loans of less than Rs 1.5 mn (earlier Rs 1mn) and house value of Rs. 2.5 mn (earlier Rs 2 mn) - Positive for Housing Finance Companies
Key Beneficiaries - PSU BANKS
6) Sector - Textile:
Measure
Textiles Mandatory excise on branded garments negative for the sector .A mandatory excise duty of 10% is being imposed on branded readymade garments and textile made ups. Since it was under Cenvat credit yarn and fabric manufacturers may have to pay an increase excise duty of 5% vis-a-vis an optional and concessional 4% duty paid earlier.
Negative for selective companies in the segment of branded garments
7) Sector - Power:
Budget do not mentioned any significant proposal which may impact the overall sector.
8) Sector - Oil & Gas:
Budget do not mentioned any significant proposal which may impact the overall sector.
9) Sector –Packaging:
Budget do not mentioned any significant proposal which may impact the overall sector.
Source: IRIS
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