INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Although the Budget had no big-bang announcements for FMCG or consumer sectors, a few proposals could end up being positive for
these stocks.
IDBI Capital said the Budget was mildly positive for consumer and retail sector
It raised customs duty on footwear (up 10 per cent) and furniture (5 per cent), which will help the cause of Make in India and end up
benefitting stocks like Trent, Bata, Khadim, Relaxo, Shoppers Stop and Future Lifestyle Fashions.
Similarly, the aim to double milk
processing capacity by 2025 will help bring down milk prices
allied activities, apart from various measures announced for improving marketing, warehousing, increasing credit availability will increase
income realisation on agriculture and allied activities and boost disposable income.
The reduction in income-tax rates for individuals in
the lower income brackets should also go on to spur consumption for consumer goods.
A number of agricultural products are set to get cheaper
as the government withdrew customs duty on them
They include import of milk in liquid or solid form up to 10,000 tonnes, of butter ghee, butter oil and maize up to 5 lakh tonnes, besides
edible oils, vegetable oils of edible grade.
Rating agency ICRA said the Budget was marginally positive for the FMCG sector
participants, especially the processed food segment
IIFL Securities said the Budget was negative for cigarette manufacturers like Golden Tobacco, VST Industries, ITC, Godfrey Phillips and NTC
Industries, as the government raised taxes per stick by 14 per cent
This has resulted in a 5 per cent downgrade in EPS estimates for ITC.
Among white goods makers, the customs duty increase on compressors of
refrigerators and air conditioners by 250 bps will be negative for Voltas and Blue Star, and others.
