Budget 2013: Custom duty on gold likely to increase: Tulsian

In an interview to CNBC-TV18, SP Tulsian of sptulsian.com spoke about his outlook for the market ahead of Budget 2013-2014.

Below is a verbatim transcript of the interview: Q: There is general expectation that something will happen in gold companies. What are you expecting and how would it impact the few stocks, which are listed in that space? A: I think the custom duty on gold is likely to increase, because the government has been harping on curtailing the current account deficit and rightly so if you have such a huge USD 45-50 dollar import that is affecting the current account deficit. So, if gold custom duty is increased that will give better margin to gold finance companies, which should be positive for Muthoot Finance and Manappuram Finance. If one see from jewellery makers’ point of view like Titan Industries or PC Jeweller or Gitanjali Gems, it will be very negative because people may say that they will be having some gains on inventory for the time being but that will be for a short duration or maybe very limited to the extent of the inventory but whenever gold prices starts moving up definitely the consumption falls and more specially when you have the saving rate fallen to about 30 percent. So, negative for the jewellery makers and positive for the finance companies.