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.
Among the major beneficiaries could be Jubilant Foodworks, HUL and Nestle, the brokerage said.The brokerage came out with an accumulate rating on Jubilant Food (target: Rs 1,844) and hold rating on Trent (Rs 845).Care Ratings said increased allocations to agriculture and 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.
There is an increased thrust on strengthening the cold-chain infrastructure and warehousing network, which augurs well for industry participants, especially the processed food segment.
The focus on strengthening warehouse infrastructure will be a long-term positive for the industry, it said in a note.
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.