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2018-19

The Government released its last full year Budget before the next General Elections.
Focus on farm, infra, housing, MSME and healthcare sectors was the underlying theme of the Union Budget. Even
with higher allocation to pension and subsidies, fiscal deficit has been restricted to 3.5% and 3.3% of GDP in FY18
and FY19 respectively on the back of improvement in GST collections.

Key Themes and Stocks to Watch

Automobile

Announcements Stocks/Industry to be in focus
Import duty has been increased on Truck and Bus
radial tyres from 10% to 15% Positive for companies having higher exposure to the MHCV
segment:
Import duty on CKD and CBU imports of motor JK Tyres
vehicles, motor cars, motor cycles has been Balkrishna Industries
increased from 10% to 15%.
Positive for domestic automobile companies:
Maruti Suzuki
M&M

Agriculture and related activities

Announcements Stocks/Industry to be in focus
With an emphasis on generating higher income
for farmers, MSP for Kharif Crops to be 1.5x of Across all agri-input stocks
production cost As this would promote higher spends on seeds, fertilizer and
farm equipment

Banking/NBFCs

Announcements Stocks/Industry to be in focus
Housing for all by 2022 as the Government will
establish a dedicated Affordable Housing Fund Positive for housing finance companies like:
(AHF) in National Housing Bank, funded from DHFL
priority sector lending shortfall and fully serviced L&T Finance Holdings
bonds authorized by the Government of India.

Increased allocation under MUDRA loans to Positive for micro credit and micro finance companies like:
Rs 3 trillion. Ujjivan

4 ARIHANT CAPITAL ¡ february 2018