The government has hiked import duty on high-end consumer items up to 20 percent.
The government has hiked import duty on high-end consumer items including washing machines, air conditioner, footwear, diamonds, jet fuel as a part of its plan to get foreign funds flowing back to India and to reduce current account deficit (CAD) as it seeks to stabilise the domestic currency.
The change in rates will be effective from 27 September, the finance ministry said in a release, adding that the total value of imports of these 19 items in the year 2017-18 was about Rs 86,000 crore.
Voltas was quoting at Rs 548, down 4.2 percent, Havells India was quoting at Rs 634.3, down 2 percent and Whirlpool of India was quoting at Rs 1,425, down 1.5 percent.
Research house Morgan Stanley has kept an equal-weight call on Havells with a target at Rs 712 per share.
Research house feels that increase in duty on consumer durables will hurt earnings in H2FY19. Also, commissioning of AC plant will moderate the impact in FY20.
Medium-term outlook for consumer durables is intact, it added.
Meanwhile, the domestic player Blue Star is trading higher by 2.5 percent despite custom duty hike.
The company is not very worried about custom duty hike as import content is not more than 20 percent currently, Suneel Advani, Chairman of Blue Star told CNBC-TV18.
Company is impacted, but not significantly by basic customs duty hike. The impact of duty hike may be seen more in the next year. The prices of ACs may go up by 4-5 percent, he added.Posted by Rakesh Patil