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MODERATOR:
Hello and welcome to the chat with G Chokkalingam, founder & managing director, Equinomics Research on Budget impact on markets and portfolio strategy
G.CHOKKALINGAM:
Hello everyone!
DHANANJAY RATHORE
Sir what is the prime difference between FII and FDI?
G.CHOKKALINGAM
FII is investment in equities without management control. FDI is direct investment in the ventures with possible managment control
RAM KARTHIK
This is the first time, I'm witnessing market movements during budget day. How should we approach the market in the following days in the backdrop of Budget?
G.CHOKKALINGAM
One should not be too bullish on the mkt based on budget - 17% hike in tax revenues for a second year in a row is quite doubtful as GDP growth is revised downward and many sectors are joining what i call "single digit growth" syndrome" . Secondly, normally good corporate results come first - i stiil expect many more companies to post poor results for december quarter - so it is better to wait for corporate earnings and then play on stocks
BENEDICT JEROME
Can you sum up in brief, what is the best and worst part in this Budget? Which sector will benefit the most from this budget? Answers as 1. Best Part 2. Worst Part 3. Priority Sector
G.CHOKKALINGAM
Best for the mkt are not imposing capital gain tax for shares & over 24% hike in infra outlays. I think affordable housing, fertilizer companies and housing products producers should benefit - but first two segments are already over priced. It should also give boost to large infra companies like L&T, ABB etc. Worst part is that there is no innovation in the budget. I also have a doubt that the govt may impose some tax on capital gains some time later in April with immediate effect. so one should remain cauitious
BENEDICT JEROME
Sir, what were your top 3 expectations from the budget and was it delivered?
G.CHOKKALINGAM
I was expecting some innovations in maximizing resources and measures for boosting private investments. Both havent happened. I also expected anit-dumping duty on tyres. But i expect some measures to happen outside budget. - They could be negative for the mkt - like capital gain tax on shares
AASHISH
What is the best pick for investment purpose as of now?
G.CHOKKALINGAM
Indigo, MOIL and Balmer Lawrie Company (personally we hold MOIL)
SAM
Your comments on Bharti Infratel and Abbott india. How much of Bharti infratel revenues are likely to be affected in the short-term due to Vodafone-Idea merger?
G.CHOKKALINGAM
I think only 10% of revenues may be affected for infratel. But mkt has over reacted in my view. This company has huge tower assets and strong balance sheet. On the other hand mobile companies need good support from towers to improve their quality. Also i have my own doubt whether this merger will finally go through as this mkt is highly oligopolistic with a few controlling 90% mkt share. I like Abbotte India for its growth and balance sheet, also considering steep fall in stock price
ASHISH BADAYA
What is your take on Unichem Labs as of now, as it is one one of your top recommended stocks on television. I have 60 shares of it at Rs 225 per share. Should i hold it, buy more or sell it?
G.CHOKKALINGAM
i find valuation of Unichem is stretched - now we like JB Chemical, Albert David and also Lupin, apart from Abbott. We personally invested in JB Chemicals
ASHISH BADAYA
What is your view on Sasken Communication now? is it a hold, buy or sell?
G.CHOKKALINGAM
Above Rs.400 one can book profit in sasken
NADEEM
Can you shed some light on electoral bonds by political parties that Jaitley spoke about in his Budget speech? How will it work?
G.CHOKKALINGAM
I am yet to see finer details - but attempt is to avoid black money and also to make of use of limited remonetization. i believe that the govt will not print entire quantum of high notes which were banned. There would be continuous liquidity crunch. Forcing donars to buy electorla bonds and giving to politicians will avoid issues from limited monetization and also bring in transparency
KARAN
Your take on IRCTC and IRCON listing in stock exchanges?
G.CHOKKALINGAM
It is a very smart move - in the past govt is always known for distressed sale of equities from PSUs at poor valuation. Now there is a bubble in valuation of business models like what IRCTC does. So i am sure the govt will phenomenal money from this listing. Infra / engineering sector also still enjoys quite high valuation. So these issues will help the govt to boost its revenues through divestments