Interim Budget 2019 Reaction - Mr. Harsh Jagnani, Vice President & Sector Head-Corporate Ratings, ICRA

Impact- Neutral

The budget emphasised on importance of increasing mobile penetration and digitisation in benefitting the lives of people, be it through access of information, development of e-markets, direct benefit transfer, or digital delivery of services. Government's continued focus on creating a robust digital infrastructure and increasing connectivity across the country, as well as efforts towards developing artificial intelligence and other technologies would provide greater opportunities to telecom operators and drive higher data offtake. There would also be need for increased optic fibre layout and strengthening of telecommunication infrastructure, which bodes well for equipment manufacturers and assemblers, and optic fiber cable manufacturers.

The revised estimate (RE) of non-tax revenues from communication services for FY2019 stands at Rs. 39,245 crore which is 19% lower than the budget estimate (BE) of 48,661 crore, and closer to our earlier estimates. The reduction in RE is primarily on account of lower than projected revenues generated by telecom sector resulting in lower share to Government. The BE for FY2020 stands at Rs. 41,520 crore, 6% higher than RE for FY2019. This does not factor in any spectrum auctions in FY2020.

Shares of ICRA LTD. was last trading in BSE at Rs.3019.95 as compared to the previous close of Rs. 3019. The total number of shares traded during the day was 511 in over 13 trades.

The stock hit an intraday high of Rs. 3019.95 and intraday low of 2997. The net turnover during the day was Rs. 1531732.

Source : Equity Bulls

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