Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Union Budget
Budget 2011-2012 Home
Industry Expectations - Budget 2011-2012
Industry Reactions - Budget 2011-2012
Budget 2010-2011
Budget 2010-2011 Home
Industry Expectations - Budget 2010-2011
Industry Reactions - Budget 2010-2011
Contributor's Corner
Bonanza Portfolio
Hemant K Gupta
Krish Bhatt
S A A R T H I
Trinity Investments
Exchange Information
BSE 2009 Holidays
NSE 2009 Holidays
Investor Guide
Depository & Dematerialisation
Grievance Redressal
Investor Guide
SEBI
Trading of Securities
Transfer of Securities
Your Rights
Budget 2009-2010
Budget 2009-2010 Home
Industry Expectations - Budget 2009-2010
Industry Reactions - Budget 2009-2010
Interim Budget 2009-2010 Home
Industry Expectations - Interim Budget 2009
Budget 2008-2009
Railway Budget 2008-2009
Industry Expectations - Budget 2008
Union Budget 2008-2009
Highlights of Budget 2008-2009
Summary of Budget 2008-2009
Industry Reactions - Budget 2008
IPOs
Current IPOs
Past IPOs
IPO Subscription
Mutual Funds
Gold Exchange Traded Fund
MF Unique Holding
Forthcoming Dividends
ELSS Schemes Comparison
Tax Plans
New Fund Offers
Research
Arbitrages
Equity
Market Whispers
Tax Planning
Home
Equity Linked Savings Scheme
Post Office MIS
9% GOI Senior Citizens Savings Scheme
8% Savings (Taxable) Bonds
Kisan Vikas Patra
National Savings Certificate
Public Provident Fund
Union Budget

| More

Union Budget 2017-18 - Fiscal Prudence combined with Thrust on Rural, Infra & Housing - Reliance Securities

Posted On: 2017-02-01 21:16:28

Amidst reviving global macros and receding headwinds in domestic recovery post demonetization, the Union Budget 2017-18 has focused on following key areas (1) meeting fiscal consolidation trajectory as envisaged under FRBM Act (fiscal deficit at 3.2% for FY18E and 3.0% for FY19E) (2) increased outlay for rural economy and infrastructure (3) buoyant net tax revenue, aided by receipts from demonetization.

Union Budget 2017-18 has also provided tax concessions to the lower middle income and salaried class, which is expected to boost consumption of basic goods. It is a pleasant balancing-act between managing fiscal discipline and stimulating economy by adequately providing for social infrastructure programmes. The Budget has accorded top priority to farm / rural, social and infrastructure sectors with enhanced allocations. It has calmed the nerves of equity market participants by maintaining status quo on taxation of long-term capital gains.

Fiscal Prudence Maintained

On the macro front, the Government has maintained its stance on fiscal deficit. It aims to contain the same at 3.2% for FY17-18E compared to 3.5% in FY16-17, and it aims to achieve fiscal consolidation mainly through 13% rise in net tax proceeds to Rs1,227bn and 60% increase in disinvestment proceeds to Rs725bn.

Tax Revenue Growth Assumes Buoyancy due to Demonetization

The Union Budget has projected a 12.2% rise in gross tax revenue, which appears to be realistic. Tax revenue of the Central Government shows a respectable improvement of 12.8% over last year, led by normalization of transfers towards states. Income Tax and Corporate Taxes have been projected to rise by ~25% and 9%, respectively. Growth in Income Tax assumes buoyancy due to augmented tax proceeds in the aftermath of demonetization.

Implications & Sectoral Impact

Fiscal prudence, increased thrust on rural / farming and housing sectors bode well for the broader economy. We see a benign interest rate scenario, going forward. Increasing allocation towards rural sector augurs well for the FMCG sector as it is expected to aid revival of rural demand. Lower government borrowings will help banking sector in terms of higher gain on excess SLR holdings. Also, increase in tax breaks for the Non Performing Assets (NPAs) from 7.5% to 8.5% augurs well for banking sector profitability. Increase in capital outlay seems to be positive for cement, infrastructure developers, capital goods and construction companies. Excise duty on cigarettes has been increased by just 6%, which is positive for companies like ITC considering that average excise hike in the past five years stood at over 15%. MUDRA outlay has been doubled, which will be good for the Micro Finance Institutions (MFIs) and newly created Small Finance Banks (SFBs). Thrust on affordable housing will be good for select realty players and small-ticket Housing Finance Companies (HFCs).

Outlook & Valuation

Sensex has rallied ~5.5% YTD led by value buying from domestic fund houses. Expectation of positive budget in the aftermath of demonetization also kept sentiment buoyant. Demonetization will impact earnings growth of companies in FY17E and markets will be able to assess the full impact only after 4QFY17E. Though the Government has indicated a contraction of ~0.5% in GDP growth in FY18E, we expect domestic recovery to pick-up over FY18-19E on the back of revival of rural demand, consumption boost and pick-up in infrastructure development activities. Currently, the Sensex is trading at 19.5x FY17E EPS, which is roughly at mean valuation of past 10 years. Downside from these levels seems limited owing to reasonable valuation, low base of earnings and likely pick-up after three lackadaisical years.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com





Other Headlines:

Post budget reaction - Mr. Mayur Gandhi, Chief Financial Officer, Schenker India Pvt. Ltd.
Union Budget Reaction - Mr.N.K.Prasad, President and CEO, CAMS
Don't be in a hurry to book profits, further steam left in the market: Angel Broking
Lords Hotels & Resorts on Union Budget 2017
Union Budget Reactions from Restaurateurs in Mumbai
Twitter records over 700K Tweets with #Budget2017
Budget reaction - Fintech sector - AGS Transact Technologies Limited
Post-Budget View - DTDC Express Limited
Budget reaction - Mahindra Lifespace Developers Limited
Post Budget Reaction - Haier India
CNBC-TV18 Mint Budget Verdict' brings India's policy makers
Comments on Budget 2017 - Mr. Kamlesh Patel, CMD, Asian Granito India Ltd
Post Budget Quote on Healthcare sector - Dr. P. M. Bhujang, President, Association of Hospitals
Union Budget 2017 Reaction - Mr Kamal Nandi, Business Head & EVP, Godrej Appliances
Budget Reaction - Mr Pirojshaw Sarkari, CEO, Mahindra Logistics
Realty Sector Hails The Union Budget 2017 - 18
4 ways the Budget 2017 will benefit Startups - Mr. Sujayath Ali, Co-founder and CEO, Voonik
Union Budget - Reaction - Ecommerce, Travel, Fitness, Cosmetics
Union Budget announcements for Pharma Industry - Khaitan & Co.
Budget Reaction - Khaitan & Co. on Ecommerce and FIPB abolished
Post Budget Reaction - Pradeep Dadha, CEO and Founder, Netmeds.com
Post-budget reaction - Mr. Parth Nyati, COO, TradingBells
Post Union Budget reaction - Mr. Abnish Kumar Sudhanshu, Amrapali Aadya Trading & Investments
Budget Reaction: Logistics Industry - Anjani Mandal, CEO, Fortigo Network
Reaction on Budget - Radhika Rao, Economist DBS bank
Budget 2017 - Infrastructure sector - Centrum Infrastructure Advisory Limited
Post-budget reaction - Mr. Mustafa Nadeem, CEO, Epic Reseach
A disciplined and sensible budget; rural, housing and consumption sectors get major boost: Angel Broking
Post Budget Reaction - Anshul Mittal, Co-Founder, Konsult
Budget Reaction - Travel and Tourism - RCI India
Budget Reaction - Manufacturing Industry - K. Madhavan, MD, Peps Industries
Budget Reactions - Mr Himanshu Pujara, Managing Director, Euronet Services India Pvt Ltd
Union Budget 2017 - Mr. Manu Agarwal, Founder & CEO of Naaptol
Budget 2017 Reaction - Videocon
Post Budget Reaction - Education / Startup sector
Budget Reaction - Mr. Amit Modi, Director, ABA Corp and Vice President CREDAI Western UP
Post Budget Reaction - Mr. Vikas Khanvelkar, Managing Director, DesignTech Systems Ltd.
Technologies for Skills Development - Union Budget Reaction from eLearning sector - Skillsoft India
Union Budget 2017 Reaction - Truebil - Shubh Bansal - Co-founder and Chief of Marketing
Budget Reaction - Amitabh Chaudhry - Managing Director and Chief Executive Officer, HDFC Life
Budget Reaction - Rushabh Gandhi, IndiaFirst Life Insurance
Post Budget Reaction: Talentedge Ed-Tech firm
Union Budget 2017 - Sameer Segal, Founder and CEO - Artoo
A Budget less on Micro economics and more on Macro economics - Ms. Debadutta Upadhyaya - Co-founder, Timesaverz.com
Taking Ease of Doing Business from India to a Digitally Healthy Bharat - Dinesh Agarwal, Founder and CEO,IndiaMART.com
Budget 2017 seems to be positive for skill development - Mr. Dinesh Goel,Co-Founder & CEO, Hunarr.co.in
Budget measures aimed at empowering women Ms. Neha Bagaria,Co-Founder & CEO, JobsForHer
Hero of Budget 2017 is rural sector - Mr. Vishwavijay Singh, Co-founder, SaleBhai.com
Union Budget View - Mr. Sunil Gupta, Founder & Director, ExportersIndia.com
Budget 2017 - Ms. Sangeeta Banerjee - Co-Founder & CEO - ApartmentADDA


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2017