Anand Rathi, ::Budget FY12 – A Preview - Passive fiscal consolidation to continue

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Budget FY12 – A Preview
Passive fiscal consolidation to continue
Overall expectations from the budget are modestly positive for
almost all sectors except Autos. Despite concerns regarding
likely increase in fiscal deficit in FY12, we expect cash balance
transfer from FY11 to FY12 to improve the fiscal situation
substantially.

 Fiscal consolidation to continue. FY12 budget is not likely to
see any one-off revenue bonanza as in FY11. On our assumption
of 16.5% growth in tax revenue and 9.6% growth in total
expenditure, we estimate the fiscal deficit at 4.5% in FY12.
 Market borrowing to be low. In FY12, net market borrowing is
likely to be `3.5trn. However, the carrying forward, from FY11 to
FY12, of a substantial cash balance (~`700bn) would substantially
reduce the need for market borrowing in FY12.
 Emphasis on agriculture. The major focus is likely to be on
agriculture, with special emphasis on improving productivity
through greater investment, technology use and innovation.
 Modestly positive for most sectors. While most sectors – Cap
Goods, Consumer, Oil & Gas, Cement, Construction, Financial
Services, Pharmaceuticals, Power and Technology – expect
modest positive impact of the budget, the Auto sector is likely to
be impacted negatively.
 Stock ideas. We expect positive impact of the budget on Oil
PSUs, Educomp, Everonn and NIIT.