Retail stocks rally as Budget commits to multi-brand FDI

Mumbai, March 16: Shares of retail companies gained value as the Finance Minister, Mr Pranab Mukherjee, said that efforts are on to arrive at a consensus on allowing foreign investment in multi-brand retail business.

Shopper’s Stop gained 3.3 per cent, Pantaloon Retail was up 1.5 per cent, Trent Ltd was up 1.8 per cent and Provogue was up 10.5 per cent. Kouton Retail also gained 3.5 per cent.

Presenting his Union Budget in Parliament, Mr Mukherjee said that the decision on allowing FDI in multi-brand retail business has been kept in abeyance, but efforts are on to arrive at a broad-based consensus after consultations with state governments and other stakeholders.

The overall market was also up, with over 180 points gain in the benchmark Sensex at 11.30 am, as Mr Mukherjee said that bold reforms were required to push forward the economic growth. He also said that steps would be taken to deepen the Indian capital markets.

Courtesy: The Hindu Businessline

Union Budget: Media & Entertainment (M & E) Sector

Under the hammer of a myriad of taxes in various forms and multifarious statutory compliances, the Media and Entertainment (M & E) sector of India was looking upto the Finance Minister for some rationalization. The DTH space was expecting some relief on the tax front, because they are paying, entertainment tax, license fee, service tax and value added tax. The DTH sector, was looking forward to the Finance Ministry to provide some relief in license fee by reducing it from the current 10% to 6% as was earlier recommended by Trai. The DTH players were demanding a basic customs duty cut on digital head ends and set top boxes to zero for three years to give a boost to digitization. The sector hoped for simplification of the onerous tax laws and resolution of some of the long standing tax controversies impacting this sector. 
Moreover, levy of service tax and VAT on copyright acquired in content has been a major flash-point for the industry. Huge levy of entertainment tax (in excess of 30% to 40%) on film exhibition is another area of major concern. On the Broadcasting space, the industry is plagued with a host of tax issues as was mentioned earlier, the prominent ones being uncertainty surrounding TDS on several payments & higher withholding tax @ 20% in the absence of PAN. Taxation of Foreign Telecasting Companies (FTCs) also continues to be a bone of contention between the FTCs and the Tax office. Issues surrounding potential levy of service tax as well as VAT on activation charges and recharge coupon vouchers has been haunting the DTH industry. 
Unfortunately, Dr. Pranab Mukherjee's Union Budget, 2012-13, drew flak on most of these fronts, though the Finance Bill, has some silver lining. Let me jot them down for you:

(i) For starters, with the opening up of the venture capital sector, the investments in the M & E sector will become attractive. Currently, VCs are allowed to invest only in nine specified sectors.

(ii) Secondly, the finance minister cheering the centenary year of the Indian film industry towards this end, made one important announcement in the Budget for the M&E sector. He had put forth a proposal to exempt the industry from service tax on copyright on cinematographic films. With this move the exhibitors would be exempted from levy of service tax on payments made by them to distributors for exploitation of cinematographic rights. Thus, Service tax will now, not be applicable on copyrights relating to recording of cinematograph films. This will provide a major relief to the M&E Industry.

Jehil Thakkar, Head of Media and Entertainment, KPMG says: "This is good for the industry as they have been pushing for this for a long time. This move of exempting service tax on copyright on cinematographic films will only improve the overall cash flows and improve finances of the film sector." 
However, Atul Goel, Managing Director, E City Ventures, while applauding the move to exempt the service tax said, "This is a good move as we have been burdened with multiple taxes. But, we would like the entertainment tax to fully subsumed in GST (to avoid the double charge of service tax and entertainment tax)  to result in seamless pass-through of such indirect taxes."

According to Rakesh Jariwala, Partner and Tax Expert, Media & Entertainment, Ernst & Young, "Opening up of venture capital investment route, which was earlier not available to investments in the media and entertainment industry, will indeed help as the investments in the M&E industry will become more attractive. Also, exemption to the film industry from copyright related matters is a very positive move, though announcement on taxation of admission to entertainment and amusement under the negative list provisions will require review in the fine print to examine impact from an overall supply chain perspective."

(iii) Though service tax has been increased to 12 per cent from 10 per cent but it is widely assumed that the DTH and cable operators will pass on the small additional burden to the end consumers. 
The Rs.9290 crore film sector in India produces around 1,000 films a year in about 20 languages. India is not only the largest film producers but also the largest film watchers in the world with annual admissions exceeding 3 billion tickets. However, the Hindi film industry has not been able to establish a common marketplace for itself because of the burden of huge entertainment tax levied by the various states. 

Going back to the big picture, in the context of this year's Budget, we have very significant political and macroeconomic challenges as a country. On the political side, the Finance Minister was unable to bring any tough measures of reform, because it would have been difficult for him to get it passed in the Parliament. 

On gold front, the FM in this Budget, has increased import duty from 2 to 4%. For the current year, India is going to import 60 billion dollars of gold. India's entire current account deficit is 60 billion dollars. So gold imports are taking away a lot of India's foreign exchange. By increasing import duty from 2 to 4%, the Finance Minister hopes to collect revenues if Indians continue to import so much gold.
On the other hand, what has happened is that Indians saving surpluses, which otherwise would go into productive investments like equities or debt or any other channel, have been investing disproportionately in gold. This is moving the flow of saving into financial investments into an unproductive asset like gold. So by increasing duty, the Finance Minster is trying to kill two birds with one stone,. Number one collect more revenue, and number two - reduce the amount of gold imports. 
This new addition to the Finance Bill is expected to give some lift to the sagging sentiments of the equity markets. 

Sources: 

(a) Open Markets

(b) Money Control

(c) Business Today, India

(d) Crisil Research

Finance Minister: "Mein Anari", I build Castles in Air!!

Surprisingly there is no dearth of "Psychopaths" among the Indian Inc and our Analyst Fraternity, to praise a Pedestrian Union Budget coming from a Prosaic Team!! Hilarious!! The budget documents are best suited to be used as "Tissue Papers", Forget It!! “It's a relatively neutral budget relying on a relatively optimistic growth outlook which speaks to the level of political paralysis in the country,” said a London-based strategist who spoke on condition of anonymity. “They appear not to be taking decisive action in one way or the other”.

The best description of the Union Budget as usual came from the Communists, who are very good at sloganeering: "It is an absolute clerical and ineffective budget. It could have been prepared by the clerical staff of the finance ministry and there was no need for the finance minister to prepare it," CPI leader Gurudas Dasgupta said reacting to finance minister Pranab Mukherjee's Budget. It seems the BJP, does not have any witty or out of the box statements to say, except belching out those hackneyed "Laloo Yadav, RB Paswan", etc type statements. Poor BJP---these people from the largest opposition party want to take head-on the mighty Congress??!! Best wishes to them, so that they do at least better than what they did in Uttar Pradesh.!! BJP at present is a radar-less and toothless party now...Uttar Pradesh has more leaders than workers....!! 

Moneylife (http://moneylife.in): The Union Budget 2012 has tried to attract small investors into the stock market leaving mutual funds in a mess. It shows knee jerk reaction, no understanding of ground reality and policy confusion
Finance Minister Pranab Mukherjee, in his budget presentation speech for the fiscal 2012-13, announced a slew of measures to encourage the small investor to participate in equity markets. Would these be effective or was the FM poorly advised about what his measures really mean? The budget proposals include:
Rajiv Gandhi Equity Scheme to deepen investor base and reduce volatility, allows for 50% deduction to the small investor, to an annual limit of Rs50,000 in equities. However, this will apply to only those investors up to Rs10 lakh income to be eligible for the scheme. Investment will also have to be locked-in for three years.
The Securities Transaction Tax (STT) on cash delivery transactions has been reduced by 20%, from 0.125% to 0.1%, in order to reduce transaction costs in the capital markets.
Additionally, the FM has modified IPO guidelines to broaden investor reach. To achieve this, it is mandatory for companies to issue IPOs of Rs10 crore and above in electronic form through nationwide broker network of stock exchanges.
The finance minister has also proposed a central Know Your Customer (KYC) depository will be developed in 2012-13 to avoid multiplicity of registration and data upkeep.
The overwhelming emphasis on the equity markets is a policy volte face, most likely a result of no organised thinking but a knee jerk reaction to the declining interest of savers in the equity markets. For the last 20 years, there has been a continuous emphasis on mutual funds as an effective tool for small investor participation and investment. Investors have been told not to trade in equities if they are not sure what they are doing. However, now the FM is offering incentives to small investors to buy equities while mutual funds have been effectively killed when the market regulator started messing around with commissions (starting with banning entry load and upfront commission in August 2009) under chairman CB Bhave, which the current chairman has perpetuated. Following this, many distributors have stopped selling mutual funds thus restricting their reach to small investors. And now, instead of fixing this problem, the government is instead pushing these investors from mutual funds back to equities without any debate.
The tax incentive for equity investment is also a not a well-thought out idea. We have been had 100% exemption long-term capital gains in equity investment (over one year) for years now and yet there has been little equity participation despite this huge benefit. What is the point of having a three-year lock-in period when long-term capital gains, which is totally exempt for capital gains over just a year is not being availed of? Merely locking in investors with the Rajiv Gandhi Scheme, for Rs50,000 tax benefit, is convoluted and has no logic. They might as well bypass the scheme altogether and invest in equities, where capital gains are tax-free. The government seems to have missed the point.
The reduction in STT for delivery trades, while welcome, would also not mean much. The bulk of volumes comes from speculation in futures and options. This minor tweak of reducing STT for delivery trades amounts to no incentive at all for non-investors and is unlikely to entice them to the stock market.
Why has the FM suddenly tried to bring small investors back into the market? After years of thoughtless policies, cumbersome regulations, poor grievance redressal and no course correction, India's investor population is declining.
Moneylife has been repeatedly pointing out that India's investor population has declined from 20 million in the 1990s to just over 8 million by 2009 (as per the D Swarup Committee report). 

All this while the regulators who live in the ivory tower were unconcerned about this phenomenon. Suddenly, the drought of new issues and the government's failure to disinvest easily has woken up policy makers (mainly the market regulator) to the sad state of stock markets. But since they have no truck with reality, the measures they have suggested to the FM would turn out to be meaningless.

New Body (excluding headline), Courtesy: Money Life

Indian IT companies trying their best to retain clients: Mr.Nitin Shah, Allied Digital

While the global slowdown has made things difficult for India IT companies, most firms are able to increase their earnings due to appreciation of the dollar, said Nitin Shah, CMD, Allied Digital. Excerpts of the interview:
Q. What has been the impact of the economic slowdown on the IT industry? How are the Indian IT companies having global operations doing currently?
The economic slowdown has resulted in reduction in discretionary expenditure and capex. Decision making in sales has become slow. Indian IT companies are trying their best to retain existing clients but the acquisition of new clients is slow, due to reduction in expenditure and slowdown in the market. However, the good news is that most of the IT companies are making money, due to dollar appreciation. This is some sort of a "blessing in disguise" as earning from the same business is more (due to dollar appreciation).
Q. What about Allied Digital? How is it beating competition in the changed scenario?
Allied Digital has been foreseeing a paradigm shift in the IT industry- especially as far as IT computing is concerned. More and more people are adopting 'cloud computing' (pay for use model). This therefore, certainly increases the opex-spend of the customers. Allied Digital has the unique advantage of managing the IT infrastructure by having lesser dependency on human resources and by leveraging tools & technology. This automation in service delivery-resulting in huge amount of savings in the cost of services.
Q. What has been the growth strategy of Allied Digital in recent years?
Allied Digital's growth strategy is to focus more on IT infrastructure management services business and focus mainly on large customer base in India as well as in USA, UK and Australia. Allied Digital's business model will be made more outcome based and SLA driven against the practice in IT industry in recent past when the billing was based on time and material model (linear model).
Q. Is your company also looking at fresh acquisitions for growth?
The worldwide slowdown has impacted heavily the smaller companies' operations in the overseas markets like USA, UK & Australia. Because of the sluggish market, sales cycle gets unduly delayed. So our strategy is to buy and acquire such performing companies rather than building on own. In the current scenario, in the overseas market, buying new business is far better alternative than building and at the same time it is more cost-effective.
Q. What are your future growth targets and plans?
As I have stated earlier, I believe in 'small term pain, long term gain'. We see 2011-12 as the year of transformation. Our plans in the transformation process will be vigorous at every level. The growth for the current year may not be high but we will be able to have complete readiness to exploit cloud computing and service business. All this will eventually lead to Allied Digital's substantial growth in the coming future.

Courtesy: The Economic Times

Market Mantra

The morning inputs to the Paid Service Members:BUDGET SPECIAL-STRONG RECO: ULTRA SHORT TERM BUY MINI_NIFTY @ MKT PRICE 5470 FOR 40-50 POINT UPMOVE. FURTHER BUY Mini_NIFTY_FUT AT CURRENT LEVELS@5428, FOR A GOOD UPMOVE. KEEP SL 5399.

Buy Dish TV Ltd at Rs.55.50, T--Rs.57, SL--Rs.53. There could be some positive announcements for the sector. 
Buy Volta Ltd at Rs.125--127, SL-Rs.110, T-Rs.155. Voltas Limited is an engineering solutions provider and project specialist. The Company offers engineering solutions for a range of industries in areas, such as heating, ventilation and air conditioning, refrigeration, electro-mechanical projects, textile machinery, mining and construction equipment, materials handling equipment, water management and treatment, cold chain solutions, building management systems, and indoor air quality. Business segments of Voltas are: Electro-mechanical Projects and Services, Engineering Products and Services, Unitary Cooling Products for Comfort and Commercial use, and Others. Others Segment consists of Lalbuksh Voltas Engineering Services & Trading LLC (Lalvol), a Joint Venture company (JVC), in Sultanate of Oman, engaged in horticulture, water management and purification.

Market Mantra

Buy Mini_Nifty at 5375, T--5410, SL--5350. This is the time to accumulate Nifty, as the market remains extremely BULLISH after today's RBI policy meet. 
Buy Educomp Solutions Ltd at Rs.203-206, T--Rs.210-216, SL--Rs.200. Those who are holding can continue to hold the scrip.

THE TMC PROBABLY THINKS THE INDIAN RAILWAYS ARE RUN ON FREE AIR: HILARIOUS, RIDICULOUS AND UNFORTUNATE

NEW DELHI: Railway Minister Dinesh Trivedi sent his resignation letter to Prime Minister Manmohan Singh in the wee hours of Thursday, according to sources. Trivedi offered resignation after his own party, the Trinamool Congress, termed across-the-board passenger fare hikes as a "hostile act".
Budget at ET: Budget 2012 | Union Budget | Railway Budget 2012 | Budget News
Late Wednesday evening, Trinamool leader and West Bengal Chief Minister Mamata Banerjee asked Prime Minister Manmohan Singh to replace Trivedi with Mukul Roy, a Trinamool MP.
The core committee of the Congress, which met at the PM's residence late in the night, was of the view that there is little option but to drop Trivedi.
Mamata, in her conversation with Finance Minister Pranab Mukherjee, is learnt to have insisted that Mukul Roy should announce the rollback in passenger fare hike.
Earlier, Singh described the budget as "forwardlooking" and Trivedi defended the fare hikes as something taken in the interest of the railways and the nation even as Banerjee expressed her displeasure saying the episode had damaged her party's "Maa, Mati, Manush" image.
"We are unhappy with the railway budget. We are against any hike in passenger fares and we will oppose the move. I am assuring you that we will not allow any hike," she said while addressing a meeting in Nandigram. Trivedi himself had appeared reconciled to losing his ministry, judging by his defiant performance in a string of interviews to television channels. "It is a very big misconception that the railways is run from the Writer's Building (headquarters of West Bengal government)."
He conceded that he could not continue in the government without Banerjee's backing. "Mamata Banerjee made me a minister. If she gives the slightest hint, I will resign," Trivedi said. Trivedi's performance led to speculation by talking heads on TV channels that his actions had the tacit backing of the Congress leadership and were intended to provoke a showdown with Banerjee.
TMC REBELLION TO WEAKEN THE CENTRE;
Trinamool Congress' stand on the rail budget has once again demonstrated the trust deficit within the ruling coalition at the Centre. That the party was determined to complicate matters for the Congress became evident when its leaders said their members would back the Opposition's motion seeking the deletion of the reference to the National Counter-Terrorism Centre from the President's address.

The Congress party, which appeared reconciled to this, indicated that it could put up with the embarrassment. The Congress' stand is in stark contrast with the view expressed by Finance Minister Pranab Mukherjee on Tuesday. He had gone to the extent of saying such a move could lead to the unravelling of the government. Trinamool, however, is unlikely to withdraw support from the UPA government in the immediate future, some analysts said.

Budget 2012: Decrease Tax Burden On DTH Industry, Says Dish TV

In the financial budget of 2012, Dish TV is hoping for a positive sign from the finance minister. They are expecting to deduct the burden of taxes on the direct to home industry, because they are paying, entertainment tax, license fee, service tax and value added tax.
The company has recommended the government to provide some relief in license fee by reducing it from the current 10% to 6% as earlier recommended by Trai. Salil Kapoor COO Dish TV said, “The double charge of service tax and entertainment tax should be subsumed in Good and Service Tax.”
The company also said that the government should lessen the basic customs duty on digital head ends and set top boxes to zero for three years to give a boost to digitalization. Dish TV has 12.5 million subscribers and has a 29% market share among six players in the DTH market in the county.

Courtesy: Open Markets

SHOCKING ACT OF "COMRADE" DIDI

[DIDI (Ms.Mamata Banerjee) is aping almost the same caricatures, which the back-dated Communists used to do during their tenure and which made many of the industrial units sick. This is retarded politics and might question her credibility as the CM of a state like West Bengal. If this goes on, then I need to rethink my position as far as the TMC is concerned. The moot point is that a public transportation system cannot run like a tattered Maruti--800 car, and especially when the Indian Railways need immediate funds for expansion, modernization and most importantly for the safety of passengers. When our next door country, China is proposing to run "Bullet Trains" which do not stop at stations, we are still running steam engines on some sections--really unfortunate. This kind of attitude will starve the railways, of the much needed life blood, which is so necessary at this stage. The sad part of a story is that: some of the Railway Ministers have exploited the Indian Railways so much that it is on the verge of becoming a sick unit.....The question is: why should the passengers not pay for the legitimate charges, when in any case they need to pay either they go by Road or Air---really Shocking act of Didi......From where the funds will come for the completion of the existing projects? A case in point is Silchar--Lumding gauge (from meter to broad gauge) conversion exercise which was announced by then Railway Minister, Mr.Ram Vilas Paswan in 1996 and which was scheduled to be completed in 2006; but alas due to continuous shortage of funds, more than 60% of the project work is yet to be completed, creating untold suffering to the people of Barak Valley (in South Assam). So, who is responsible for the sufferings of innocent people of South Assam, for more than a decade? I do not support these kinds of 3rd rated populist politics, which are best suited for the obsolete Communists......!! It is really a horrible act, from the CM of a state (to ask for sacking a reform oriented Railway Minister).  Didi is using the same old story of politicizing of religion, poor masses and blame games. Accidentally didi was once quoted in media saying, "Cos for 24 years I’ve been living next door to the Communists........Now, who the hell are these Neo-Communists?” Is didi trying to score some brownie points with this kind of Neo-Communist tactics or these are just fits of idiosyncratic outbursts? Only time would tell but for the moment I would only say, grow up didi......you are now the CM of a state...........or else we would be forced to abandon you.....!!]

NEW DELHI: Trinamool Congress (TMC) supremo and West Bengal chief minister Mamata Banerjee, upset with railway minister Dinesh Trivedi's Railway Budget proposal hiking passenger fares, wrote to Prime Minister Manmohan Singh on Wednesday asking him to sack Trivedi. She also wrote to the PM asking him to replace Trivedi with another TMC party member Mukul Roy.

"Yes, I have written to the Prime Minister seeking his replacement with Mukul Roy, another union minister," Banerjee told news agency PTI.

Earlier, Mamata Banerjee had rejected the proposed hike in railway fares as anti-poor, anti-people and asked the railway minister to rollback the fare hike immediately. However, in interviews later in the afternoon and evening, Dinesh Trivedi showed defiance to his own party's wishes and put his 'country before the party'.

The suave, US-educated Trivedi, 61, found himself in a piquant situation immediately after he presented his maiden Railway budget in which he proposed an across-the-board hike in passenger fares to mop up an additional Rs 4,000 crore for spending on railway safety. On a cue Mamata Banerjee party MPs attacked the hike and demanded a rollback in keeping with her populist politics which has resulted in repeated trouble for the UPA government over issues such as FDI in retail and petrol price hike.

Mamata followed up with a public declaration that she will not not allow the fare hike. She complained she had not not been consulted by Trivedi, which he confirmed. It appeared for some time that the minister may work out a compromise with his party by rolling back the hike in lower class fares while leaving the upper class fare increase untouched.

News body, Courtesy: The Times of India

WINNING STROKES:THINK DIFFERENT

Central Bank Ltd recommended around Rs.102, only some weeks back touched Rs.111.80 today, before closing at Rs.110.10. The bank stocks are on a dream run, after the RBI cut the CRR to ease some of the liquidity concerns.

Jai Balaji Industries Ltd hit the 3rd consecutive buyer freeze today as it closed Rs.44.90. There is a general turnaround in the steel sector and all those companies who are in this sector are expected to benefited. Moreover, any cut in the interest rate would spur the demand from the real estate and construction companies. Many of the construction work has been either running slow or are stalled due to shortage of funds due to tight liquidity in the system. 
Sintex Industries Ltd today moved closer towards its 2nd target of Rs.96 before closing at around Rs.89.45. It is a wonderful company and it is only time when it starts moving towards, Rs.96--103 in the next 6 months time frame. 

Today, I recommended Dish TV Ltd looking from all angles; from the short term point of view. The company came out with good numbers for the Q3FY12. Also, India's top four metros-Delhi, Mumbai, Chennai and Kolkata-will replace all analog television networks with digital transmission from July 1, 2012. This has led to a scramble between multi-system operators (companies which create and distribute a bouquet of channels through cable networks) and DTH operators who transmit their own bouquet of channels via satellites, with a slight edge towards the DTH operators.. Earlier in this month, Dish TV chief executive R C Venkateish said the company has launched a pilot project in Delhi and he expects to grab 1-1.5 million subscribers across cities in the short term through tie-ups with the cable operators. Currently, the company has agreements with about thirty cable operators, but expects to roll out this scheme in the country and rope in about 3,000 local cable operators in the next two months. Dish TV currently has 12.5 million gross subscribers and 9.5 million net subscribers in the country as of December 31, 2011. All these developments only points to a positive development in the counter but surprisingly the stock fell when the markets were moving up. 

Today's fall in the price according to me, was more due to Chartical (or what they call Technical) Factors or due to Chartists creating fears in the minds of the investors, at a time when the things are improving for the company!! How is that the stock of India's largest DTH operator should correct when the market moves up? Is there any answer for these chartists who give all sorts of weird targets??!! SEBI should ban these television chartists, who run Parallel businesses in collusion with TV Channels, instead of their tirade against the Blog Posts, Message Boards, Finance Forums, etc. 
It is surprising as how SEBI allows, these fellows to run a kingdom of sorts in front of Television Cameras, with virtually no accountability. I have given a number of instances earlier how these so called analysts, have mislead the investors, in the broad day light. I do not want to name the analysts or any TV Channel as everyone knows who are behind this game to grab the eye balls. 
But then it is fine if once in a while they give the opinions on some shares in front of TV Cameras, however, if this affair covers most of the time during the market hours (including pre and post sessions), then there is genuine malice in the system, which is generally turning out to be pandemic across the channels, with one channel roping in so and so market-men  to generated TRPs, against the others. On the contrary I do not find the same thing happening in such a rampant way (or flouting of rules), in case foreign editions of either Bloomberg or CNBC. Therefore, it is a matter of great shame for this great country that an executive and prestigious body like SEBI is after the poor fellows who runs blogs and give free services to the investors and who have better track record ( and accountability) but allows all those so called TV-Analysts to run a virtual fiefdom, without proper checks and balances. Yes, those blogs who are running without proper disclaimer, can be given warning, but saying that most of the blogs publish spurious information does not hold ice. SEBI officials should understand that to become a successful blogger and to get genuine traffic on the site, day-after-day and year-after-year, in midst of stiff competitions, is not at all an easy job. It requires lot of efforts and homework, may be except those copy cat ones, who sells the products of others and gives their stamps. Hence to stay put for years and decades, one has to develop credibility and accountability and this does not comes overnight. Yes, it takes years and even decades to get synchronized with the targeted audience. 
SEBI should understand that.....while an analyst on a TV channel can hop from one channel to another, with public forgetting what he said in one and what in another, a blogger and  his posts stays on the blog for public scrutiny--therefore it is very difficult to escape. Therefore, allowing of "Parallel Emperors" when he/she is answerable to no one is dangerous and the most unfortunate part in the Indian Capital Markets. This has also been a hot topic in one of the Mumbai (Bombay) based weeklies, a couple of years back and I has earlier posted one such write up here in this blog. But surprisingly SEBI is allowing competitions among the analysts on Television Channels in full bloom---the casualty being the poor investors. This should stop once for all--the television channels are meant to give information to the people and not encourage "Gambling" or "Satta/Matka", with the whole market under the grip of "Chartical Levels" spelled out by these Chatists. Once in a while such programmes are okay but as mentioned earlier if these kinds of jokes are made into a competition, then I have serious objections. When Chartical (or that pseudo-name, Technical Analysis) Analysis is not a complete science, then why allow them to look, as if the chartists are the ultimate messiahs of all forms of illness?? Is should stop once for all, for the healthy movements of the markets.  Also, I wonder how these TV Analysts get so much time during the market hours, when I virtually do not even get time to eat food during this period, most of the time. Are they out of job that they are employed by the Television channels for these kinds of hilarious exercises. How do they service their clients or who do they service (except the hapless viewers) in private when they are engaged by the Television Channels, for most of the time during the market hours---a point to ponder isn't it? 

Market Mantra

The morning call to the Paid Groups, buy DISH TV at Rs.57.50, T--Rs.61, SL--Rs.56.5.....The rational behind recommendation is that India's top four metros-Delhi, Mumbai, Chennai and Kolkata-will replace all analog television networks with digital transmission from July 1, 2012. This has led to a scramble between multi system operators (companies which create and distribute a bouquet of channels through cable networks) and DTH operators who transmit their own bouquet of channels via satellites. Earlier in this month, Dish TV chief executive RC Venkateish said the company has launched a pilot project in Delhi and he expects to grab 1-1.5 million subscribers across cities in the short term through tie-ups with the cable operators. Currently, the company has agreements with about thirty cable operators, but expects to roll out this scheme in the country and rope in about 3,000 local cable operators in the next two months. Dish TV currently has 12.5 million gross subscribers and 9.5 million net subscribers in the country as of December 31, 2011. All these developments only points to a positive development in the counter.

1st target achieved in S Kumar Nationwide Ltd, LTP--Rs.36.70, long of Rs.33.50, so profit booking was advised. So, long term investors, what to do? Join the Paid Service, to get full support during the market hours. 

Jai Balaji Industries Ltd hit the buyer freeze in the opening trading. What is the latest in the company, which is propelling such a move?Join the Paid Service, to know all these hidden stories in the counters.... 
Educomp Solutions Ltd comes down to Rs.202.40, after the Premium Members were asked to exit the scrip around Rs.204-205, as the scrip was not performing as expected, making slight profit on BTST basis.

WINNING STROKES: THINK DIFFERENT

NTPC Ltd recommended yesterday, touched Rs.174.70 and almost reached the first target of Rs.175.

Jai Balaji Industries Ltd  hit the buyer freeze in the opening trade, as expected. This is the 2nd consecutive buyer freeze hit buy the shares of the company. 

My recommended Sintex Industries Ltd around Rs.82-83, hit the first target of Rs.87 today, where profit booking was advised. 
Join the Paid Services at affordable rates or Profit Sharing Services for portfolios more than Rs.5 lakhs (2 seats are left). Now it is time to make maximum from your investments, as the market conditions are improving dramatically. Leave  your tensions to experts who will do that on your behalf. 

My recommended D B Realty Ltd reached the first target of Rs.85, where profit booking was suggested. 

The investors should buy Reliance Mediaworks Ltd at around Rs.89-90, for a target of  Rs.97-99, in the next few trading sessions. In the same sense, the investors should continue to add fresh positions in Educomp Solutions Ltd in all dips, T--Rs.217.

Market Mantra

Buy Educomp Solutions Ltd at Rs.200--201, T--Rs..217, SL--Rs.193. This call is valid only for 10 days. The Company has launched multi-variants like Smart_Class 3D, Smart_Class, EduClass to take advantage of rising product demand of all sections of schools. Company in the last quarter has signed more than 10,000 classrooms in a quarter (43% up on YOY basis), highest ever since the company has launched the product. Educomp Solutions Ltd is India's largest Education Company in India. Starting in 1994, as a company providing computer labs and training to school, Educomp has come a long way to becoming the largest education company in India today, reaching almost 20 million learners and educators across the world.  The next phase in the evolution of Educomp is the phase of growth with consolidation of operations. It is hoped that the new CEO of the company would lead growth and profitability of the business, consolidate operations, drive synergies across businesses, implement  processes and systems and focus on free cash flow generation. Every dip should be used to buy the stock.

Jai Balaji Industries Ltd  hits another buyer freeze in the opening trade. Congratulation to those who have  bought the scrip around Rs.38--39 or averaged it down to lower levels.  

Lanco Infra Ltd (LITL) recommended a couple of days back to the Paid Group members, at around Rs.20.20---20.50, today reached Rs.22.

Kalindi Rail Nirman Ltd

The scrip could be moving towards Rs.123--126 mark before the Railway budget. Today, it could be trying to clear the resistance zone of Rs.117-118. 
Note: The two seats are open for Profit Sharing Arrangement (in the ratio of 70:30) between you and me, in Rs.5 lakhs category. Those who are interested can contact me at the earliest before it gets filled up.

Those are not willing to agree to this ratio, are requested to not to send me requests.

Cloud Computing and Allied Digital Services Ltd

The Economic  Times, 28th February, 2012.

It is a well known fact that, the next phase of growth in case of Allied Digital Services Ltd (ADSL) would come from Cloud Computing Services, apart from its other services. The company in this direction, have appointed a new CEO, Mr.P Shah. 

“True ROI value, apart from the direct cost savings, can make a success story only if the organization adopts a maturity roadmap in terms of people and processes apart from technology upgrades. Like in our private cloud solutions, we help businesses transform their existing infrastructure to an agile environment that is well- aligned business needs. Clear predictive cost planning, infrastructure elasticity and operational efficiency add value to your business," informs Paresh Shah, Global CEO of Allied Digital.

WINNING STROKES: THINK DIFFERENT

Jai Balaji Industries Ltd hit the buyer freeze in the late afternoon trade. The reasons are best known to all. 

As expected Sintex Industries Ltd moved to Rs.86, before cooling a bit. 

Country Club India Ltd, is doing absolutely fine. According to my close sources, all the FCCB related issues will be solved by 31st March, 2012. Moreover, the company is expanding not only in India but also in overseas.
Key benchmark indices edged higher for the second day in a row as bank stocks rose after the Reserve Bank of India (RBI) announced a reduction of 75 basis points in banks' cash reserve ratio (CRR) requirement to ease liquidity situation in the banking system. The 50-unit S&P CNX Nifty attained its highest closing level in more than a week and half. The barometer index, BSE Sensex, scaled its highest closing level in more than one week. Index heavyweight Reliance Industries (RIL) edged higher. The Sensex advanced 84.43 points or 0.48%, up close to 90 points from the day's low and off about 185 points from the day's high.
Auto and IT stocks were mixed. Engineering and construction major L&T rose for the second day in a row after naming a new CEO and MD. GAIL (India) rose after twin bulk deals. The market breadth was positive. BSE Small-Cap and Mid-Cap indices outperformed the Sensex.
From a recent low of 17,145.52 on 7 March 2012, the BSE Sensex has gained 442.15 points or 2.57% in two trading sessions. The barometer index has lost 161.02 points or 0.9% in March 2012 so far (till 12 March 2012). The index has surged 2,132.75 points or 13.79% in calendar 2012 so far (till 12 March 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 2,451.81 points or 16.19%. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 2,223.47 points or 11.22%.
Coming back to today's trade, the market pared gains after a firm start triggered by the Reserve Bank of India's announcement after markets hours on Friday, 9 March 2012, of a reduction in cash reserve ratio (CRR) of banks by 75 basis points to ease liquidity situation in the banking system. The market came off lows in morning trade. Key benchmark indices regained positive zone after slipping into the red in mid-morning trade. The market regained strength in afternoon trade. The market held positive zone in mid-afternoon trade.
The BSE Sensex advanced 84.43 points or 0.48% to settle at 17,587.67, its highest closing level since 3 March 2012. The index jumped 268.86 points at the day's high of 17,772.10 in opening trade, its highest level since 29 February 2012. The index fell 8.59 points at the day's low of 17,494.65 in early afternoon trade.
The S&P CNX Nifty advanced 26 points or 0.49% to 5,359.55, its highest closing level since 29 February 2012. The index hit a high of 5,421.90 and a low of 5,327.30 in intraday trade.
The BSE Mid-Cap index gained 1.06% and the BSE Small-Cap index rose 0.7%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2339 crore, lower than Rs 3475.67 crore clocked on Friday, 9 March 2012.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,599 shares rose and 1,246 shares fell. A total of 121 shares were unchanged.
Among the 30-share Sensex pack, 17 gained while the rest declined.
Index heavyweight Reliance Industries (RIL) advanced 3.02% to Rs 796.95 in volatile trade. The stock hit a high of Rs 802.80 and low of Rs 781. RIL along with BP PLC will reportedly submit a joint plan to the government to develop the D6 natural gas block and its satellite fields as an integrated unit. The proposal is significant in that it will seek approval to develop an entire block as one unit, rather than follow the current practice of getting clearance for one oil or natural gas field at a time.
In 2011, BP purchased a 30% stake in 21 RIL's oil and gas blocks across India, including D6, which is India's biggest gas discovery so far. RIL is facing declining output at D6 due to reservoir complexity, a natural decline in reserves and delays in developing satellite fields. Output at the D1, D3 and MA fields in the D6 block has plunged to about 38 million metric standard cubic meters a day (MMSCMD) from 60 MMSCMD in June 2010. It is estimated that output will fall further to 27.60 MMSCMD in the next financial year starting April, and to 22.60 MMSCMD in the year after that.
GAIL (India) rose 1.59% to Rs 354.30 on volume of 17.3 lakh shares. A bulk deal of 8 lakh shares at Rs 351.75 per share was executed in the counter on BSE in morning trade. Another bulk deal of 7 lakh shares at Rs 352 per share was also struck on the counter on the BSE.
India's largest engineering and construction major L&T advanced 3.54%, with the stock extending Friday's 5.27% gain. During market hours on Friday, 9 March 2012, the company said K. Venkataramanan will take over as the Chief Executive Officer and Managing Director of L&T from 1 April 2012. He will succeed A. M. Naik who will step down as Managing Director, but continue as Executive Chairman of the group, the company added. The decision was taken by the board of directors to bifurcate the position of Chairman & Managing Director.
Most bank stocks rose after the Reserve Bank of India (RBI) announced a reduction of 75 basis points in banks' cash reserve ratio (CRR) requirement to ease liquidity situation in the banking system. The announcement was made after trading hours on Friday, 9 March 2012.
India's largest bank by branch network State Bank of India jumped 3.96% and was the top gainer from the Sensex pack. The bank's chairman Pratip Chaudhuri was quoted by the media as saying on Sunday, 11 March 2012, that the bank may go in for a follow-on-public-offer (FPO) or institutional placement of shares next fiscal to fund its business growth.
India's biggest private sector bank in terms of branch network, ICICI Bank gained 1.63%. India's second largest bank by net profit HDFC Bank shed 0.57%.
Interest rate sensitive auto stocks were mixed. India's largest commercial vehicles maker by sales Tata Motors gained 1.54%, with the stock extending two-day 4.96% gain.
India's largest utility vehicles maker Mahindra & Mahindra (M&M) declined 1.88%. During market hours Friday, 9 March 2012, M&M said, as part of its ongoing rationalisation of finished stocks, it would be observing no production days up to 2 days per week for the remaining period of March 2012 at the company's tractor plants located at Rudrapur, Nagpur and Jaipur. The management does not envisage any material adverse impact on availability of tractors in the market due to adequacy of tractor stocks to serve the market requirements, the company said.
India's largest car maker by sales Maruti Suzuki India slipped 0.32%.
India's largest bike maker by sales Hero MotoCorp rose 0.96% on reports the company is building in-house capabilities to make its own engines by teaming up with the world's largest privately-owned engine developer AVL of Austria.
India's second largest bike maker by sales Bajaj Auto rose 2.31%.
The Budget announcement by Finance Minister Pranab Mukherjee on 16 March 2012 is expected to bring bad news for the automobile sector, with a likelihood of more taxes, especially on diesel vehicles, which will lead to price hikes and further slowdown in demand.
IT pivotals were mixed. India's third largest software services exporter by revenues Wipro rose 1.16%. India's second largest software services exporter by revenue Infosys declined 1.51%. India's largest software services exporter by revenue TCS fell 1.35%.
Shares of companies whose fortunes are linked to orders from Indian Railways jumped ahead of the railway budget this week. Kernex Microsystems, Kalindee Rail Nirman, Titagarh Wagons, BEML, and Stone India rose by between 1.15% to 3.78%. The Railway Budget will be presented on Wednesday, 14 March 2012.
Given the financial condition of railways, this Rail Budget is likely to seek a two-year moratorium on paying dividend to the government.
Textile stocks were mostly lower after trade secretary Rahul Khullar told reporters on Monday a panel of ministers will likely review a halt on fresh cotton exports from India in two weeks. Arvind Mills, Patspin India, Jindal Cotex, Jindal Worldwide, Alok Industries and Ruby Mills fell by between 0.94% to 3.23%. The government has flip-flopped on the issue of banning cotton exports. After saying it was lifting a ban on overseas sales of the fibre on the weekend, Khullar said on Monday no fresh exports would be allowed and only the quantity permitted to be sold before the ban will be allowed to be shipped.
Realty stocks gained. DLF, HDIL and D B Realty rose by between 0.29% to 8.02%. Unitech was flat. Property consultants and real estate developers have reportedly demanded industry status to the realty sector in the forthcoming Budget. They have also sought incentives to promote affordable housing and an increase in the tax exemption on home loans. To boost supply, they have also asked for a single-window clearance for real estate development projects and foreign direct investment (FDI) in multi-brand retail to create demand for retail space in shopping malls.
Metal stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange gained 1.86% on Friday, 9 March 2012. Bhushan steel, Sterlite Industries, Hindalco Industries, Tata Steel, Nalco, and Jindal Steel & Power rose by between 0.09% to 2.69%.
JSW Steel rose 2.27% after the company said it is foraying into the manufacture of electrical steel in line with the company's strategy of increasing its portfolio of value added products.
Coal India rose 0.39%. The company announced after market hours today that the board of directors of the company at its meeting held on today, 12 March 2012, has approved payment of interim dividend for the financial year 2011-12 of Rs 9.50 per share as recommended by the Audit Committee of the company.
Avance Technologies clocked highest volume of 1.98 crore shares on BSE. Dazzel Confindiv (89.67 lakh shares), Cals Refineries (79.11 lakh shares), Lanco Infratech (71.38 lakh shares) and SpiceJet (55.65 lakh shares) were the other volume toppers in that order.
SBI clocked highest turnover of Rs 159.19 crore on BSE. Multi Commodities Exchange of India (MCX) (Rs 152.21 crore), GAIL (India) (Rs 61.30 crore), L&T (Rs 53.41 crore) and Reliance Power (Rs 50.51 crore) were the other turnover toppers in that order.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1284.65 crore on Friday, 9 March 2012, as per provisional data from the stock exchanges.
Industrial production grew 6.8% in January 2012 from a year earlier, sharply higher than a revised 2.5% rise in December 2011, helped by a strong rebound in manufacturing output. Manufacturing output, which has a 75.5% weight in the index of industrial production, rose 8.5% from a year earlier in January. It had risen a revised 2.6% on year in December. Electricity production increased 3.2% from a year earlier in January while capital goods output shrank 1.5%.
The Reserve Bank of India (RBI) after market hours on Friday, 9 March 2012, surprised the markets by slashing the cash reserve ratio (CRR) by 75 basis points to 4.75% from 5.5% to ease liquidity situation. The CRR cut, effective the fortnight beginning 10 March 2012, will inject around Rs 48000 crore of primary liquidity into the banking system. At the 3rd quarter policy review in late January 2012, RBI had announced a cut of 50 basis points in CRR, thereby injecting Rs 32000 crore into the cash-strapped system.
The government will release data on inflation based on the wholesale price index (WPI) for February 2012 on Wednesday, 14 March 2012. WPI inflation for February 2012 is projected at 6.7% as per the median estimate of a poll of economists carried out by Capital Market. WPI inflation stood at 6.55% in January 2012.
Meanwhile, data on advance tax for the last installment of 15 March 2012 may provide cues on Q4 March 2012 corporate earnings.
The Reserve Bank of India (RBI) is slated to announce a mid-quarter review of the monetary policy on Thursday, 15 March 2012, a day before the presentation of the Union Budget 2012/13.
The government is working with state governments for early implementation of a goods and services tax (GST), Finance Minister Pranab Mukherjee said on 22 February 2012.
Stating that the United Progressive Alliance (UPA) was committed to honest and efficient governance, President Pratibha Patil on Monday said the country would soon be back on the high growth path of eight to nine percent from the seven percent estimated for the current fiscal. Addressing the joint session of Parliament on first day of the budget session, the President said the long-term fundamentals of the Indian economy remain robust. The government plans to achieve a 9% annual growth target in the five-year plan period ending on 31 March 2017.
Mukherjee will present the annual budget for 2012/13 on Friday, 16 March 2012, while the railways budget will be presented on Wednesday, 14 March 2012. The government will present on Thursday, 15 March 2012 the Economic Survey for 2011/12, a document on the state of economy prepared by the economic division in the ministry of finance. The annual budget is usually presented on the last working day of February. However, the budget has been delayed this time due to the assembly polls.
Reports indicate that the finance ministry is considering a proposal to increase excise duty from 10% to 12%, although still lower than the level before the 2008 financial crisis. The move is aimed at helping the government improve its fiscal situation but it is expected to push up the cost of almost all manufactured goods from food products to consumer durables and automobiles.
Meanwhile, the parliamentary standing committee on finance has given its approval to a revised version of the proposed Direct Taxes Code (DTC) Bill, 2010. The committee has recommended a more progressive tax regime, which entails widening of the income-tax slabs, increasing the exemption limit for savings and raising the ceiling for wealth tax. If accepted, these recommendations will increase disposable incomes in the hands of taxpayers, encourage savings and levy a higher tax on the rich, besides reducing compliance costs for the income-tax department.
The DTC Bill, 2010, consolidates and integrates all the direct tax laws and replaces both the Income Tax Act, 1961, and the Wealth Tax Act, 1957. The committee headed by Bharatiya Janata Party leader Yashwant Sinha, which submitted its report to the Lok Sabha speaker on Friday, 9 March 2012, has also recommended abolition of the securities transaction tax that is levied on the trading of equity shares and some other instruments.
European markets were mixed in volatile trade on Monday as China posted larger-than-expected trade deficit for February. Key benchmark indices in UK, and France were down by between 0.06% to 0.11%. Germany's DAX was up 0.16%.
Asian markets were trading lower on Monday, 12 March 2012, as sentiment sagged after China reported a much bigger than expected trade deficit of $31.48 billion in February, turning around sharply from a $27.28 billion surplus in January. Key benchmark indices in China, Japan, Indonesia, Singapore, South Korea and Taiwan were down by between 0.03% to 1.1%. Hong Kong's Hang Seng rose 0.23%.
China's exports rose less than expected while imports climbed more than anticipated by economists, with the country importing record volumes of crude-oil in February 2012.
Trading of US index futures indicated a flat opening of US stocks on Monday, 12 March 2012. US stocks advanced on Friday, 9 March 2012 as investors brushed off the technical default by Greece and focused instead on another strong monthly jobs report. The Dow Jones Industrial Average advanced 14.08 points, or 0.11%, to 12,922.02. The Standard & Poor's 500 Index rose 4.96 points, or 0.36%, to 1,370.87. The Nasdaq Composite index gained 17.92 points, or 0.60%, to 2,988.34.
In economic data, US employers added 227,000 jobs to their payrolls in February 2012, government data showed, while the unemployment rate held at a three-year low of 8.3%.

Powered by Capital Market - Live News

Buy Central Bank Ltd above Rs.104

This stock has been recommended by me in several earlier occasions. Now it is time to recommend again. Central bank of India is one of 18 Public Sector banks in India to get recapitalized from the government over the next few months. The infusion of funds will improve the financial health of the bank, as its capital adequacy ratio (CAR) will be raised more than desired level of 12%. Also, any equity capital restructuring would lead to an improvement in the bank's credit rating and also facilitate the adoption of Basel II norms.

THE UNION BUDGET 2012-13

We are on the threshold of witnessing a mega event-presentation of the the union Budget 2012-13 by the current Finance Minister, Dr.Pranab Mukherjee. This year, the Indians will look at the FM, to find out how he addresses the ballooning deficit and a slowing down economy against the backdrop of inflation concerns.

Along with the commoners major industrial bodies have already given their wish list and are keeping their fingers crossed to see what comes out from "Dr.Pranab Mukherjee's Box".

A majority of employees surveyed expect Finance Minister to increase the income tax exemption limit upto Rs.3 lakh in the upcoming Budget, in line with rising inflation; on the other hand the mining sector is seeking duty rationalization in exports along with freight charges. According to the experts, any hike in the IT exemption limits will enhance people's disposable incomes, which, in turn, will boost consumption spending as well as savings.
Agriculture sector, the darling of the government, is as usual expected to get special treatment and the SME segment wants a progressive tax regime for Corporate Tax. Many well known economists have suggested to trim down the subsidies in the fuel, fertilizer and food spaces. 
Our GDP growth has already suffered due to savage hike in the interest rate structures, during the last several months, as the RBI in collusion with the government adopted puerile and hackneyed policies to stall the inflation; without properly addressing the supply side factors. It is now a given proposition that Indian GDP growth will be nowhere close to 9% that once made us so happy--we now probably  have to stay put with a  max-7.5% growth in FY12, given the poor quality of the FMO and a un-innovative RBI team. 
It would note be an exaggeration to mentioned that the maze of problems have only accelerated during the last few months, due to lack of clarity in the  policy reforms on the part of the government. In addition the state elections in between virtually, turned a statue out of a living governmental machinery. Now with the elections over, and the Congress getting a spank on the back, for their regressive, "Left-like" policies, we can hope government to be a little proactive in terms of pursuing the reform agenda. It has again been proved that as a Prime Minister, Dr.Manmohan Singh is a disaster.

Moreover, the Finance Minister is already under server pressure to rein in the expenditure in the forthcoming budget. The weak GDP numbers for the third quarter had already rattled the India Inc and had given some indication that the much expected rebound in growth may take longer than earlier thought of. 

Government’s commitment towards fiscal consolidation is the need of the hour, but a weak economic regime might prevent the government from hiking tax rates to garner more revenues, making his task to give a lift to the sagging economy, more complicated and difficult.

Hold Allahabad Bank

Please Click on the Chart to expand

As mentioned a number of times here in this blog, those who are holding Banking/Bank, Real Estate, Construction, Metal and Auto counters are expected party (make merry) this week, after the RBI went full gung-go and cut the rates by more than the expected levels. This will probably, herald the beginning of new phase of Bull run which could take the Nifty beyond 5750. If you remember, I had asked all to close the short position on the last Thursday. 

Budget’s policy direction key for metal producers
In April-February 2012, steel consumption has risen by just 5.2% year-on-year, and production has slowed down to match consumption
~~Ravi Ananthanarayanan

Metal companies have been hit hard by a global slowdown that has affected output and prices, even as input costs have not fallen commensurately. Rising interest rates have not only hit the cost of financing working capital, but also made project finance more expensive. Projects have also been hit by delays due to environmental and land acquisition related issues. Much of what ails the sector therefore lies outside the ambit of the budget’s tax proposals. Can the budget then offer any real hope to investors in these companies?
A recurring concern among economy-watchers is that capital investments in the economy have taken a backseat. That has had an indirect impact on metals companies. Apart from sectors such as automobiles that are consumption-oriented and also consume metal, key sources of demand for metals are from infrastructure, real estate and industrial projects.
In April-February 2012, steel consumption has risen by just 5.2% year-on-year, and production has slowed down to match consumption. In April-December 2011, aluminium production was up by just 3.3%, while copper metal production was up by 1.7%. Those are not growth rates to be proud of, especially when most domestic companies have expanded capacity and are set to expand further.
The government will be certain to make the obligatory noises about infrastructure creation and creating jobs through industrial growth. But investors should be looking at how the government proposes to spur investment-related spending. If it creates space by curbing growth in consumption-related spending, or uses tax proposals to spur investment, capital investments may actually get a boost. Some clarity on the government’s intent to pass key legislation—such as on mining bill and land acquisition—will also provide more certainty on the policy front.
The budget’s tax proposals could provide some pain or relief. If the excise duty rate is rolled back to its pre-2008 levels, meaning an increase of 2 percentage points, it will affect all sectors including metals. There is talk about an import duty exemption for thermal coal, and an increase in duty on hot rolled coils from 5% to 10%. If it happens, integrated steel producers will benefit. Changes in freight rates will also affect costs.
Unless the government does something dramatic, indirect tax proposals are likely to play a secondary role compared to policy direction in determining the reaction of investors in metal stocks.

Courtesy: Live Mint