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Budget good for Maruti, Dabur, Ranbaxy, HUL

2008-03-03 12:15:31 Source : Bazaar/CNBC-TV18

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CNBC-TV18�s Executive Editor, Udayan Mukherjee - The ones, which will take a positive leaf out of the Budget, it is fairly easy to analyse autos for sure; excise cuts, people have more money all of that will rub-off well. You have seen that in this kind of a very shaky kind of market condition, autos seem to have bottomed out earlier. They are not falling too much more. They are the stocks, which are trading well off their lows.

So it�s good for two-wheelers eventually, I think demand will filter in after all these moves. It�s good for some of the small car manufacturers, good for Maruti, Tata Motors, Hero Honda and Bajaj Auto. But Bajaj Auto is going for a demerger so that will be the dominant theme out there.

Budget is good for hotels. Five-year tax holidays are coming for budget hotels, maybe some of the smaller hotel stocks, not so much the Indian Hotels of the world. They might benefit but it depends on what they announce over the next few months in terms of the plans and which locations they want to address. So you could see it being positive for hotels as well.

In FMCG, you just want to look outside ITC into the lot and the fact that there is more money in rural India as well. Probably it does good things for stocks like Dabur. So that might be a stock that you need to watch out for because if there are beneficiaries in the FMCG space, I think Dabur might benefit quite a bit; sentimentally too and it�s a liquid kind of an FMCG stock. Godrej Consumer and Hindustan Unilever will also benefit.

I suspect after this budget that whole relative game between Hindustan Unilever and ITC gets a bit skewed towards Hindustan Unilever. So for large institutional owners they may want to be with a Hindustan Unilever now for foreseeable future next couple of years rather than with ITC. So those are some FMCG winners that might do well.

I think pharmaceuticals benefit less because of the excise but the R&D reductions etc might be good for companies like Ranbaxy. They might do well and in any case pharmaceuticals had been an outperforming sector for the last couple of weeks. So that outperformance might well continue. Though it�s a little specious argument that when excise goes down people will pop more pills or buy more pills because they are paying for 10% less or anything like that.

So that argument does not hold. But there are other positives for pharmaceuticals and for a sector, which anyway seem to be in the limelight they might continue to do well. Those are the positive sectors.