It is largely believed that the government may tinker with personal income tax, which could hold the key to revival of discretionary demand. Higher allocation to rural centric schemes should help FMCG players log higher volume growth.
Sharekhan believes the government might increase the basic tax exemption limit to Rs 5 lakh from Rs 2.5 lakh for all, thus eliminating the 5 per cent tax slab of Rs 2.5 lakh to 5 lakh.
“It may replace the 20 per cent tax rate for the slab of Rs 5-10 lakh with 10 per cent; add a slab of 20 per cent for incomes of Rs 10-20 lakh and 30 per cent slab for income above Rs 20 lakh per annum,” it said.
A likely reduction in personal income tax rates should improve sentiment and benefit small ticket discretionary consumption such as QSR and apparel players.
Any roll-back of MEIS (Merchandise Export India Scheme) support to mobile phone manufacturers back to 4 per cent should be positive for Dixon Technologies. Any increase in customs duty for IDU, ODU and fully built air conditioners should be positive for Amber Enterprises and negative for Voltas, Whirlpool of India.
A potential increase in customs duty on gold to bridge budget deficit should be a cause of concerns for jewellery players like Titan Company.
Meanwhile, higher allocation to rural centric schemes should be favourable for companies such as Hindustan UnileverNSE 1.88 %, Colgate Palmolive India, Dabur, Emami and Jyothy Laboratories.
Shares of Emami (up 5.51 per cent) , Hindustan Unilever (up 2.94 per cent) , Godrej Consumer Products (up 2.07 per cent) , Colgate Palmolive (India) (up 1.67 per cent) , Marico (up 1.08 per cent) , Tata Global Beverages (up 0.83 per cent) , Godrej Industries (up 0.45 per cent) , Nestle India (up 0.37 per cent) , United Spirits (up 0.33 per cent) , ITC (up 0.3 per cent) , Britannia Industries (up 0.14 per cent) , Dabur India (up 0.13 per cent) and P & G Hygiene (up 0.08 per cent) were among the top gainers.
The Nifty FMCG index was trading 1.06 per cent up at 31102.2 around 10:43 am.
Benchmark NSE Nifty50 index was up 17.80 points at 11979.9 , while the BSE Sensex was up 63.83 points at 40787.32 .
Among the 50 stocks in the Nifty index, 24 were trading in the green, while 26 were in the red.
Shares of YES Bank, Vodafone Idea, SBI, Tata Motors, ONGC, PowerGrid, BEL, Coal India Ltd, NTPC and GMR Infra were among the most traded shares on the NSE.