Auto Ind sees roll back of excise duty cut: ICICIdirect.com
Published on Wed, Jul 01, 2009 at 12:33 | Source : Moneycontrol.com
Updated at Wed, Jul 01, 2009 at 13:22
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Auto Ind sees roll back of excise duty cut: ICICIdirect.com
According to ICICIdirect.com, roll back of excise duty cut, removal of additional specific duties of Rs 15,000/ 20,000 imposed on high fuel consuming utility vehicles (UVs) over 1500 cc and extension of accelerated depreciation for all commercial vehicles from September 30 2009 to March 31 2010 is expected for the auto sector from the budget.
According to ICICIdirect.com, roll back of excise duty cut, removal of additional specific duties of Rs 15,000/ 20,000 imposed on high fuel consuming utility vehicles (UVs) over 1500 cc and extension of accelerated depreciation for all commercial vehicles from September 30 2009 to March 31 2010 is expected for the auto sector from the budget.
Expectations
Roll back of excise duty cut
Extension of accelerated depreciation for all commercial vehicles from September 30 2009 to March 31 2010
Removal of additional specific duties of Rs 15,000/ 20,000 imposed on high fuel consuming utility vehicles (UVs) over 1500 cc
Increase in spend on road infrastructure and state transport
Increase in import duties on certain components to protect domestic industries as well as imposition of anti dumping duty on tyres imported from China
ICICI Direct's View
Considering the widening fiscal deficit, we expect a likely roll back of cut in excise duties to the extent of 2%. This will be negative for all automobile companies. However, companies would pass on the same to consumers through price hikes.
Key beneficiaries would be Tata Motors, Ashok Leyland, M&M and Eicher Motors from extension of accelerated depreciation for all commercial vehicles. This would support volume growth for these companies.
As fuel prices have declined from their peak levels there may be removal of additional specific duties on high fuel consuming vehicles.
Any step (easy finance) to improve rural demand would augur well for companies.
Auto ancillary and tyre companies to benefit
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