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India Equity Research Reports, IPO and Stock News
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The key highlight for capital goods sector was the excise exemption for domestic equipment
manufacturers supplying equipment for ultra mega and mega power projects. Overall increase in
infra spend, defence and extension of sunset clause for power was on expected lines.
Excise exemption on domestic equipment for UMPP and Mega Power projects
The government has extended the excise duty exemption on equipment to Mega Power
projects, subject to certain conditions. Earlier, this was restricted to UMPP power projects
alone. In addition, the government has dropped certain restrictive conditions with regards to
applicability of this exemption. This is likely to be beneficial for domestic equipment
manufacture as it provides them with a more level playing field vis-à-vis foreign equipment
provider. This is also likely to result in lower capital cost for generation players and thus lower
electricity tariff. This is positive for BHEL and L&T.
Defence capital spending Rs692bn (up 15% yoy)
Modernisation/upgrading of defence equipment to continue; higher level of order inflows . This
is positive for Bharat Electronics and to some extent L&T and Tata Power.
Overall increase in infrastructure spending by 23% to Rs2140bn
Positive for investment in the sector and likely to result in higher level of order inflows, project
opportunities for sector players
Excise duty exemption for air-conditioning equipment/refrigeration equipment
Positive for air-conditioning/refrigeration equipment makers - the lower equipment cost
coupled with higher incentives for investment in the food processing sector should result in
higher demand for ac/refrigeration equipment. This is positive for Voltas.
Concession for components of 23 specified high voltage transmission equipment
Should be positive for multinational T&D equipment companies and negative on the margin
for domestic companies.
Extension of 80-IA benefit for power sector till FY12
On expected lines, positive for investment in the power sector.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
The key highlight for capital goods sector was the excise exemption for domestic equipment
manufacturers supplying equipment for ultra mega and mega power projects. Overall increase in
infra spend, defence and extension of sunset clause for power was on expected lines.
Excise exemption on domestic equipment for UMPP and Mega Power projects
The government has extended the excise duty exemption on equipment to Mega Power
projects, subject to certain conditions. Earlier, this was restricted to UMPP power projects
alone. In addition, the government has dropped certain restrictive conditions with regards to
applicability of this exemption. This is likely to be beneficial for domestic equipment
manufacture as it provides them with a more level playing field vis-à-vis foreign equipment
provider. This is also likely to result in lower capital cost for generation players and thus lower
electricity tariff. This is positive for BHEL and L&T.
Defence capital spending Rs692bn (up 15% yoy)
Modernisation/upgrading of defence equipment to continue; higher level of order inflows . This
is positive for Bharat Electronics and to some extent L&T and Tata Power.
Overall increase in infrastructure spending by 23% to Rs2140bn
Positive for investment in the sector and likely to result in higher level of order inflows, project
opportunities for sector players
Excise duty exemption for air-conditioning equipment/refrigeration equipment
Positive for air-conditioning/refrigeration equipment makers - the lower equipment cost
coupled with higher incentives for investment in the food processing sector should result in
higher demand for ac/refrigeration equipment. This is positive for Voltas.
Concession for components of 23 specified high voltage transmission equipment
Should be positive for multinational T&D equipment companies and negative on the margin
for domestic companies.
Extension of 80-IA benefit for power sector till FY12
On expected lines, positive for investment in the power sector.
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