Budget Reaction - Mr. Mustafa Nadeem, CEO, Epic Research

The budget in the overall scenario seems very balanced at this point in time. If we try it to compare with the interim budget there are only a few takeaways like firstly the increase in holding of up to 35% in listing companies. This is going to improve depth as well as make various listed companies available to retail participants. It will also attract foreign investment. Secondly, the additional 1.5 lakh exemption for homeowners on interest paid is a welcome move. This may have long term benefits for space as well as buyers and owners. We believe another good move that is seen in the budget is to focus on spending in infra and construction space. Opening up various routes for foreign investment and further easing the routes will bring in more long term investment in this space. The massive investment of 100 lakh crore for the next five years will boost the space and bring in more demand which has seen a slump in the last few months. With that, The rural boost of 1.95 cr houses is certainly going to improve demand for space like steel and aluminum, cement and its allied space. The reduction in tax for companies up to 400 cr is a welcome move but it could have been increased. We believe the only problem is with a 3.3% fiscal deficit number. In the current scenario with GDP projection at 7% it may see some variation. The PSU space is certainly a gainer with an increase in the limit to sectoral limit and a further 70k boost for PSU bank space will make select PSU banks a lucrative play.

Source : Equity Bulls

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