Daily Archives: February 12, 2015

12Feb

Union Budget 2015 India Predictions: Weak economy; lofty expectations, says Sharekhan

Union Budget 2015-16: Time for government to walk the talk and take concrete steps to revitalise the economy by productive allocation of windfall gains from lower subsidy bill (savings of Rs 1.2-1.5 trillion in fuel and fertiliser subsidy due to plunge in prices of crude oil and other commodities)

Importance of budget stems from the fact that economic recovery and corporate results in Q3 were weak Low utilisation in the manufacturing sector with little uptick in demand (rural consumption moderating due to unfavourable monsoon and limited hike in support prices; urban demand looking up but still early days); so private industrial capex/investment may take longer Hence, onus to revive investment cycle rests on the government through increased capital spending on infra projects

Savings in subsidies (of Rs 1.2-1.5 trillion) provides enough legroom for the government to increase public expenditure on infra projects, namely roads, railways, low-cost housing and defence.

12Feb

Union Budget 2015-16 Pre-Update: Excise duty cut, GST introduction to revive cap goods

Indian capital good companies are expecting a reduction in various excise duties in order to improve their cost competitiveness.

The industry is expecting a reduction in excise duty on copper winding wire apart from a further reduction in duty on capital goods such as construction and electrical equipment. However, the ratings agency is not very confident of Finance Minister Arun Jaitley paring the duties.

According to the report, the excise duty on copper winding wire is likely to continue at the current 12 percent (vis a vis expectation of 10 percent) and excise on capital goods too is likely to continue at the current 10 percent.

Furthermore, industry experts are hoping for a removal of state entry tax for goods already subjected to value added tax (VAT) or central sales tax (CST).

12Feb

Union Budget 2015 India Expectation: Need clarity on weighted deduction on R&D spend for IT

Clarity with respect to eligibility of IT/ITES companies for weighted deduction on R&D expenditure will help encourage investments in R&D, says a Care Ratings report on pre-Budget expectations.

It also expects deduction under Section 32AC to be extended to IT/ITES. Care says the companies are allowed a deduction of 15 percent on cost of investments. Such reduction in book profits will give the companies benefit of investments.

Infosys stock price

On February 12, 2015, at 10:07 hrs Infosys was quoting at Rs 2287.80, up Rs 0.60, or 0.03 percent. The 52-week high of the share was Rs 4401.00 and the 52-week low was Rs 1447.00.

The company’s trailing 12-month (TTM) EPS was at Rs 104.69 per share as per the quarter ended December 2014. The stock’s price-to-earnings (P/E) ratio was 21.85. The latest book value of the company is Rs 366.51 per share. At current value, the price-to-book value of the company is 6.24.

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