Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
AUTOMOBILES
BUDGET HIGHLIGHTS & IMPACT
n Status-quo maintained on excise duty
Impact: Finance Minister in his budget presentation kept the central excise
duty rates unchanged at 10% that was in line with our expectations.
Justifications given behind this move are 1. Better margin translating into higher
investment rates 2. Stay on course towards GST. We believe that this move
will make the task of the auto players a bit easier who are already facing margin
pressure due to rising commodity prices.
n Emphasis on green fuel technology/car
Impact: Finance Minister in his budget speech showed his intentions towards
promotion of vehicles that run on clean fuel. Following announcements were
made related to this aspect -
l National Mission for Hybrid and Electric Vehicles to be launched in
collaboration with all stakeholders
l Custom duty exemption and concessional rate of excise duty extended to
batteries imported by the electrical vehicle manufacturers for the replacement
market
l Vehicles based on the fuel cell or hydrogen cell technology to come under
the concessional 10% excise duty bracket
l Full exemption from custom duty and CVD in relation to import of specified
part used in the making of hybrid vehicle. Furthermore concessional rate
of excise duty at 5% will be applicable if those specified parts are produced
domestically.
l Government has also proposed to lower the excise duty rate from 10%
to 5% on kits and their parts that help convert fossil fuel vehicles into hybrid
vehicles
Above measures are towards promoting clean fuel technology. However we
do not see any major positive impact of the above mentioned measures in
the short to medium term as this segment has hardly any presence in the Indian
automobile industry.
n Focus on agriculture continues
Impact: Government through its budget continued to retain their focus on
the agriculture sector. Various schemes were announced for bringing about
the development of rural economy. Listed below are few measures which we
believe are positive for the automobile sector -
l 27% increase in credit flow to the farmers as against 18% increase provided
during the previous budget
l Increase in interest subvention from 2% to 3% for farmers who repay their
crop loans on time and thereby bringing the effective interest rate on crop
loans to 4%.
We believe that the above measures are positive for tractors players including
Escorts. Furthermore overall growth in the rural economy will be beneficial
for the 2W players as well.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
AUTOMOBILES
BUDGET HIGHLIGHTS & IMPACT
n Status-quo maintained on excise duty
Impact: Finance Minister in his budget presentation kept the central excise
duty rates unchanged at 10% that was in line with our expectations.
Justifications given behind this move are 1. Better margin translating into higher
investment rates 2. Stay on course towards GST. We believe that this move
will make the task of the auto players a bit easier who are already facing margin
pressure due to rising commodity prices.
n Emphasis on green fuel technology/car
Impact: Finance Minister in his budget speech showed his intentions towards
promotion of vehicles that run on clean fuel. Following announcements were
made related to this aspect -
l National Mission for Hybrid and Electric Vehicles to be launched in
collaboration with all stakeholders
l Custom duty exemption and concessional rate of excise duty extended to
batteries imported by the electrical vehicle manufacturers for the replacement
market
l Vehicles based on the fuel cell or hydrogen cell technology to come under
the concessional 10% excise duty bracket
l Full exemption from custom duty and CVD in relation to import of specified
part used in the making of hybrid vehicle. Furthermore concessional rate
of excise duty at 5% will be applicable if those specified parts are produced
domestically.
l Government has also proposed to lower the excise duty rate from 10%
to 5% on kits and their parts that help convert fossil fuel vehicles into hybrid
vehicles
Above measures are towards promoting clean fuel technology. However we
do not see any major positive impact of the above mentioned measures in
the short to medium term as this segment has hardly any presence in the Indian
automobile industry.
n Focus on agriculture continues
Impact: Government through its budget continued to retain their focus on
the agriculture sector. Various schemes were announced for bringing about
the development of rural economy. Listed below are few measures which we
believe are positive for the automobile sector -
l 27% increase in credit flow to the farmers as against 18% increase provided
during the previous budget
l Increase in interest subvention from 2% to 3% for farmers who repay their
crop loans on time and thereby bringing the effective interest rate on crop
loans to 4%.
We believe that the above measures are positive for tractors players including
Escorts. Furthermore overall growth in the rural economy will be beneficial
for the 2W players as well.
No comments:
Post a Comment