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IDBI Capital Report
Automobile - The further push towards electrification
Measure announced:
The battery swapping policy likely to be introduced and inter-operability standards will be formulated taking into account constraint of space in urban areas for setting up large numbers of charging stations.
Impact and our view:
This is likely to result in faster adoption and roll out of electric vehicle two-wheelers'/three-wheelers' in India by EV auto original equipment manufacturers and fasten the transition from internal combustion to EV vehicles in India.
Key stock impacted:
We expect Sona BLW Precision Forgings Ltd. to be indirect beneficiary of the same as the company remains to be prominent electric motor manufacturer in India. It has already created capability and capacity to address the upcoming opportunity.
Cement - Benefit from higher allocation to infra
Measure announced:
Total capital expenditure is increased by 27% (versus FY22RE) to Rs 10.7 trillion. On budget capex is increased by 34% to Rs 7.5 trillion and off budget is increased by 24% to Rs 3.2 trillion.
PMAY (Pradhan Mantri Awas Yojna) allocation is flat versus FY22RE at Rs 480 billion.
PMGSY (Pradhan Mantri Gram Sadak Yojna) allocation is increased by 36% versus FY22RE to Rs 190 billion.
Impact and our view:
Increase in the capital expenditure is positive for the cement sector.
In terms of concern we note that 1. there was no extension of additional deduction of Rs 1.5 lakh interest on loans for affordable housing loan and 2. there was no extension of corporate tax on the profits earned by developers of affordable housing project.
Key stock impacted:
UltraTech Cement Ltd., ACC Ltd., Shree Cement Ltd., Ambuja Cement Ltd.
Click on the attachment for full list of sectors and stocks impacted by Budget 2022 :
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