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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Capital Goods NEUTRAL
We view this budget as NEUTRAL for the Indian capital goods sector. The government
has maintained its focus on the Indian power sector with increased outlay for FY12,
which we think will benefit the power equipment companies. The government expects to
increase the share of the manufacturing sector in GDP from about 16% currently to
25% over the next 10 years. In order to drive this initiative, the government has
announced that it will come out with a manufacturing policy. There has been no major
announcement in the clean energy space except for the announcement of the launch of
a national mission for hybrid and electric vehicles.
Key positives
The government has raised the planned allocation of the budget for the power sector to
INR727.5b in FY12 from INR502.36b in FY11.
There has been an extension of excise duty exemption for equipment required for the
expansion of existing mega/UMPP projects.
A concessional rate of 5% basic customs duty, 5% countervailing duty (CVD) and zero
special additional duty (SAD) is being extended to parts and components for the
manufacture of high voltage transmission equipments.
Negatives
The budget lacked the import duty that had been expected by domestic industry based
on the recommendations of the Arun Maira Committee to make domestic manufacturers
more competitive.
No major benefits were announced for the renewable energy sector.
Impact
We expect the increased planned outlay for the power sector to benefit all the electrical
equipment manufacturers.
Top pick: Crompton Greaves
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Capital Goods NEUTRAL
We view this budget as NEUTRAL for the Indian capital goods sector. The government
has maintained its focus on the Indian power sector with increased outlay for FY12,
which we think will benefit the power equipment companies. The government expects to
increase the share of the manufacturing sector in GDP from about 16% currently to
25% over the next 10 years. In order to drive this initiative, the government has
announced that it will come out with a manufacturing policy. There has been no major
announcement in the clean energy space except for the announcement of the launch of
a national mission for hybrid and electric vehicles.
Key positives
The government has raised the planned allocation of the budget for the power sector to
INR727.5b in FY12 from INR502.36b in FY11.
There has been an extension of excise duty exemption for equipment required for the
expansion of existing mega/UMPP projects.
A concessional rate of 5% basic customs duty, 5% countervailing duty (CVD) and zero
special additional duty (SAD) is being extended to parts and components for the
manufacture of high voltage transmission equipments.
Negatives
The budget lacked the import duty that had been expected by domestic industry based
on the recommendations of the Arun Maira Committee to make domestic manufacturers
more competitive.
No major benefits were announced for the renewable energy sector.
Impact
We expect the increased planned outlay for the power sector to benefit all the electrical
equipment manufacturers.
Top pick: Crompton Greaves
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