CLSA: Consumer -No change in excise duty on cigarette

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Consumer
No change in excise duty on cigarette


No increase in excise duty on cigarettes
Big positive for ITC
Rumors of change to ad-valorem as well which could
have been big negative
Volume growth may rise to 7-8% from 1% over the
last four years
Reduction in surcharge – marginally positive
Surcharge on corporate income taxes reduced from
7.5% to 5%
1% positive impact on PAT
MAT rate increased from 18% to 18.5%
Effective tax rate remains same at ~20%
No impact on earnings of companies like Dabur, GCPL
Levy of 1% excise duty on certain products
Coffee, ketch up, soups, food mixes, ready to eat,
flavored milk etc.
Marginal negative impact on Nestle, HUL
Top picks – ITC, Marico