19th March 2012,Monday
ADANI POWER
Adani Power will benefit from the move to allow ECBs to part finance rupee debt. As on 30th September 2011, it had debt of around Rs 25,000 crore. In the December 2011 quarter, the company paid 14% of net sales as interest. Its EBIDT was Rs 10 crore and the interest outgo was Rs 139 crore.
Access to foreign loans and a reduction in withholding tax from 20% to 5% will help the company save up to 3 percentage points in interest rates.
In addition, the nod for 20% depreciation in the first year will help Adani Power to accelerate commissioning of its projects.
On the fuel front too, the budget has brought gains for the company. By 2015, it will be sourcing 66% of its coal from Coal India and the remaining from the international market, mainly Indonesia.
The government has advised Coal India to sign fuel supply agreements. Full exemption from customs duty for imported coal and a concessional CVD of 1% will make imported coal cheaper by 7-8%.
JSWSTEEL
JSW Energy will be the biggest beneficiary of the budget among utilities. Full exemption from customs duty on imported coal and a concessional CVD of 1% will make the coal cheaper by up to 8%.
This reduction in fuel cost will have a significant impact on the company's profitability as JSW Energy is completely dependent on imported coal till 2015.
Total fuel cost is around 60-65% of sales. The company sells a majority of its power on a merchant basis and most of its operations are in South, where tariffs are higher as compared to other states. Besides, the company, which has significant debt on its balance sheet, will also benefit from access to foreign loans to part finance rupee debt.
CHAMBAL FERTILIZERS
The government's intent to finalise a urea policy rings positive for Chambal Fertilisers. Any positive outcome like a nutrientbased subsidy (NBS) scheme, confirmation of the new investment policy or hike in farm gate prices for urea is likely to benefit the player.
Besides, Chambal has chalked out plans to set up single super phosphate (SSP) plants in Dahej and Gadepan with an annual capacity of 5 lakh MT and 2 lakh MT, respectively. The government's plans to encourage use of SSP and customs duty exemption on import of equipment for fertiliser manufacturing plants augurs well for the company.
ITC
Traditionally, ITC has always been adversely impacted by the budget through levy of additional excise duty on cigarettes. However, since the last two years, it has not been so bad for the company.
While last year the finance minister did not tamper with the excise duties on cigarettes, this year the basic excise duty has been increased only on cigarettes of more than 65 mm length instead of all types of cigarettes.
Besides, excise duty on competing products like bidis, pan masala, gutkha, chewing tobacco, unmanufactured tobacco, zarda and scented tobacco in pouches has also been increased. The company's stock has appreciated by 28% in the last one year against the ET FMCG index gains of 25%. With the risk of budget adversely affecting ITC now behind it, the company's growth prospects appear bright.
OPTO CIRCUITS
After two quarters, the Bangalore-based medical devices company has posted a strong performance in the quarter ended December 2011. Its stock has appreciated 3.4% in the last one year against the 8.8% gain made by the ET Pharma index.
The company has been growing steadily in both the non-invasive and invasive product segments. The non-invasive medical devices segment contributes over three-fourths of the company's revenues and has been growing steadily, especially in North America.
The company will gain from the reduction in customs duty to 2.5% with concessional CVD of 6% on components used for the manufacture of blood pressure monitors and blood glucose monitoring systems. It will also benefit from the full exemption from basic customs duty and CVD that has been provided in case of components of coronary stents and artificial heart valves.
ADANI POWER
Adani Power will benefit from the move to allow ECBs to part finance rupee debt. As on 30th September 2011, it had debt of around Rs 25,000 crore. In the December 2011 quarter, the company paid 14% of net sales as interest. Its EBIDT was Rs 10 crore and the interest outgo was Rs 139 crore.
Access to foreign loans and a reduction in withholding tax from 20% to 5% will help the company save up to 3 percentage points in interest rates.
In addition, the nod for 20% depreciation in the first year will help Adani Power to accelerate commissioning of its projects.
On the fuel front too, the budget has brought gains for the company. By 2015, it will be sourcing 66% of its coal from Coal India and the remaining from the international market, mainly Indonesia.
The government has advised Coal India to sign fuel supply agreements. Full exemption from customs duty for imported coal and a concessional CVD of 1% will make imported coal cheaper by 7-8%.
JSWSTEEL
JSW Energy will be the biggest beneficiary of the budget among utilities. Full exemption from customs duty on imported coal and a concessional CVD of 1% will make the coal cheaper by up to 8%.
This reduction in fuel cost will have a significant impact on the company's profitability as JSW Energy is completely dependent on imported coal till 2015.
Total fuel cost is around 60-65% of sales. The company sells a majority of its power on a merchant basis and most of its operations are in South, where tariffs are higher as compared to other states. Besides, the company, which has significant debt on its balance sheet, will also benefit from access to foreign loans to part finance rupee debt.
CHAMBAL FERTILIZERS
The government's intent to finalise a urea policy rings positive for Chambal Fertilisers. Any positive outcome like a nutrientbased subsidy (NBS) scheme, confirmation of the new investment policy or hike in farm gate prices for urea is likely to benefit the player.
Besides, Chambal has chalked out plans to set up single super phosphate (SSP) plants in Dahej and Gadepan with an annual capacity of 5 lakh MT and 2 lakh MT, respectively. The government's plans to encourage use of SSP and customs duty exemption on import of equipment for fertiliser manufacturing plants augurs well for the company.
ITC
Traditionally, ITC has always been adversely impacted by the budget through levy of additional excise duty on cigarettes. However, since the last two years, it has not been so bad for the company.
While last year the finance minister did not tamper with the excise duties on cigarettes, this year the basic excise duty has been increased only on cigarettes of more than 65 mm length instead of all types of cigarettes.
Besides, excise duty on competing products like bidis, pan masala, gutkha, chewing tobacco, unmanufactured tobacco, zarda and scented tobacco in pouches has also been increased. The company's stock has appreciated by 28% in the last one year against the ET FMCG index gains of 25%. With the risk of budget adversely affecting ITC now behind it, the company's growth prospects appear bright.
OPTO CIRCUITS
After two quarters, the Bangalore-based medical devices company has posted a strong performance in the quarter ended December 2011. Its stock has appreciated 3.4% in the last one year against the 8.8% gain made by the ET Pharma index.
The company has been growing steadily in both the non-invasive and invasive product segments. The non-invasive medical devices segment contributes over three-fourths of the company's revenues and has been growing steadily, especially in North America.
The company will gain from the reduction in customs duty to 2.5% with concessional CVD of 6% on components used for the manufacture of blood pressure monitors and blood glucose monitoring systems. It will also benefit from the full exemption from basic customs duty and CVD that has been provided in case of components of coronary stents and artificial heart valves.
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