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    Hello and welcome to the webchat with Dhananjay Sinha on Budget & Markets


    Hello, everyone

  • R


    Union Budget 2016 seems a pro rural budget with several incentives laid down for the rural and agricultural sector. Which stocks from the irrigation and fertilizer pack would you recommend at current levels?


    Chambal and Coromandel in the fertilizers sector are our top picks. In other agri inputs, we like Dhanuka.

  • R


    In the budget, FM has good provisions for the health sector. Health insurance of up to Rs 1 lakh per family; 3,000 new drug stores to come up. What stocks from the healthcare pack should we look at for long term?


    This is a sentimentally positive for the sector over the long term. This will bring greater number of people under the ambit of health case and it will catalyse the latent demand. New generic drug stores might improve access to health care. But the key lie in its implementation. At this juncture it is difficult to quantify the impact on relevant healthcare companies.

  • M


    The total investment in the road sector, including PMGSY allocation, would be Rs 97,000 crore and the total outlay for infrastructure in Budget 2016 currently quotes at Rs 2,21,246 crore. Do you see a revival in the ailing infrastructure stocks? What are your top bets?


    Capital allocation for MORTH has been reduced to 17000 crs, 37% lower than last year. Higher allocation under MORTH is under revenue expenditure which is increased BY 63% to Rs 26000 crs. Hence, higher target for roads is dependent on internal and external budgetary support and higher borrowings of NHAI. Revised estimate for FY16RE has been scaled down to Rs 28000 crs from Rs 46,000 crs as per FY16BE.

  • N


    Do you see an interest rate cut by the RBI with the Budget 2016 maintaining the fiscal deficit target?


    Expecting a rate cut just because the fiscal deficit target for FY17 is set lower at 3.5% of GDP does not automatically imply a case for rate easing. On overall basis we believe that the budget is on the expansionary side with higher growth for revenue expenditure (up 12%) and lower capital allocation (up 4%); it reflects worsening of quality of fiscal spending, which might be inflationary. We do not expect RBI to follow up with rate easing. Quite apart from the constraint we see arising from the budget, the liquidity scenario currently is in severe deficit, which will make rate easing ineffective and meaningless.


    Thank you very much for your time and advice. Hope to see you soon.