24 January 2018
Market snapshot
Equities - India
Close
Chg .%
Sensex
36,140
1.0
Nifty-50
11,084
1.1
Nifty-M 100
21,732
1.0
Equities-Global
Close
Chg .%
S&P 500
2,839
0.2
Nasdaq
7,460
0.7
FTSE 100
7,732
0.2
DAX
13,560
0.7
Hang Seng
13,490
2.2
Nikkei 225
24,124
1.3
Commodities
Close
Chg .%
Brent (US$/Bbl)
70
0.8
Gold ($/OZ)
1,341
0.6
Cu (US$/MT)
6,883
-2.0
Almn (US$/MT)
2,225
-0.9
Currency
Close
Chg .%
USD/INR
63.8
-0.1
USD/EUR
1.2
0.3
USD/JPY
110.3
-0.5
YIELD (%)
Close
1MChg
10 Yrs G-Sec
7.3
-0.01
10 Yrs AAA Corp
7.9
-0.01
Flows (USD b)
23-Jan
MTD
FIIs
0.2
1.4
DIIs
0.0
0.1
Volumes (INRb)
23-Jan
MTD*
Cash
493
420
F&O
9,989
7,101
Note: YTD is calendar year, *Avg
CY17%
34.4
34.0
49.9
CY17%
26.5
37.6
8.0
17.3
40.6
24.6
CY17%
24.6
15.7
27.2
31.8
CY17%
-6.0
16.6
-5.2
CY17%
0.7
0.4
CY17
7.7
14.0
YTD*
420
7,101
Today’s top research theme
Budget Preview 2018-19: Union Budget Expectations—What’s in
whose kitty?
Question is rife whether the budget will be populist
The government is set to present the Union Budget on 1st February 2018.
Expectations and excitement run high as it will be the first post-GST and last full-year
budget before the General Elections in 2019. In this note we discuss four key themes.
First, we believe that the fiscal deficit target of 3% will be postponed. We expect
the target to be revised to 3.4% for FY18 (FY18BE: 3.2%) and to 3.2% for FY19 (v/s
3% target set last year).
Second, capital spending will be budgeted to grow ~10% in FY19, following ~7% in
FY18.
Third, while rural spending may be revised upward for FY18, limited financial
resources will make it difficult to announce a targeted scheme for the poor.
Fourth, the government is expected to reduce the corporate tax rate by lowering
tax for companies with turnover of up to INR25b. This could cost ~INR100b. Apart
from this, we do not expect any further direct/indirect tax relief.
Research covered
Cos/Sector
Key Highlights
Budget Preview 2018-19 Union Budget Expectations—What’s in whose kitty?
3QFY18 interim earnings review: Headline numbers in-line; Technology
India Strategy
surprises positively; signs of consumption recovery evident
Indiabulls Housing
Continued strong growth
United Spirits
RBL Bank
GRUH Finance
PNB Housing
Dewan Hsg. Fin.
Crompton Gr. Con
Mahindra CIE
Results Expectation
Volumes disappoint; gross margins expand 530bp YoY
Strong operating performance; asset quality blip from one-off slippage
Steady quarter
Positive surprise on growth, asset quality stable
Strong growth, stable cost ratios; re-rating to continue
Sales marginally below estimates, PAT in-line
Ahead of the curve in identifying EV prospects
BIOS | CBK | CAFL | CCRI | IDEA | INDIGO | KPIT | LTI | MMFS | MPHL |
RADIOCIT | PIDI | QUESS | SITINET
Chart of the Day: Budget Preview 2018-19: Union Budget Expectations—What’s in whose
kitty?
Motilal Oswal’s expectations on key fiscal indicators from
Union Budget 2018-19
Economic
indicators
Gross fiscal
deficit
Gross market
borrowings
Net market
borrowings
Nominal GDP
Unit
INR b
% of GDP
INR b
% of GDP
INR b
% of GDP
INR b
% YoY
FY16
FY17 FY18BE
FY18F
FY19F
5,328
5,261
5,465
5,601
5,861
3.9
3.5
3.2
3.4
3.2
6,233
6,225
5,820
6,250
7,000
4.6
4.1
3.5
3.7
3.8
4,416
4,067
3,502
3,932
4,920
3.2
2.7
2.1
2.4
2.6
136,820 151,837 168,475 167,067 186,062
9.9
11.0
11.8
10.0
11.4
How do various expectations rank in terms of probability and
popularity?
By Popularity, we imply its potential impact on the stock markets
Source: MoSL
Research
Team (Gautam.Duggad@MotilalOswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.