10 mid-cap stocks raring to go on budgetary boost

Many mid- and small-cap stocks took a hit after the Budget speech, thanks to the volatility in the broader market. But over the weekend, brokerages have identified some stocks that could benefit gradually from the announcements.



AMARA RAJA BATTERIES

BROKERAGE : IIFL


Why: New manufacturing units set up in notified areas of Andhra and Telangana would be eligible for investment allowance of 15% and additional depreciation of 35%. It plans to set up a new tubular battery plant in FY16.



BATA INDIA

BROKERAGE : KARVY STOCK BROKING





Why: Excise duty on leather footwear with uppers made of leather of certain quality and retail sale price of more than Rs 1,000 a pair is being reduced from 12% to 6%.

SURYA ROSHNI, EVEREADY

BROKERAGE : SHAREKHAN





Why: Excise duty on inputs for use in manufacturing of LED drivers and MCPCB for LED lights, fixtures and lamps is being cut from 12% to 6%. SAD on inputs for use in LED lights and lamps manufacturing is being fully exempted.

CONTAINER CORPORATION

BROKERAGE : IDFC SECURITIES





Why: Improvement of rail infra to drive improved turnaround time. Impetus on Dedicated Freight Corridor maintained with increase in allocation estimated at Rs 9,300 cr — up 119% yoy.

EPC INDUSTRIES, KSB PUMPS

BROKERAGE : ICICI SECURITIES

Why: Higher credit to agricultural sector at Rs 8.5 lakh crore and allocation of Rs 5,300 crore to support various irrigation schemes.

GATEWAY DISTRIPARKS, SNOWMAN LOGISTICS AND GATI

BROKERAGE : IIFL

Why: Likely implementation of GST from April 1, 2016, allocation of Rs 1,200 crore for DMIC project and exemption in service tax for select transportation and cold chain services positive for logistic stocks.

UJAAS ENERGY, SWELECT ENERGY

BROKERAGE : SHAREKHAN

Why: The target for renewable energy capacity has been revised. Excise duty reduced to nil without CENVAT credit or 12.5% with credit for solar water heater. Duty on some components for manufacturing of solar PV cells is being fully exempted. Basic Customs duty is fully exempted on evacuated tubes used in the manufacturing of solar water heater.

WALCHANDNAGAR, CENTUM ELECTRONICS, ASTRA MICROWAVE

BROKERAGE : EDELWEISS

Why: Capital expenditure increased 15.4% to Rs 94,600 crore. The proportion of capital expenditure in total defence budget increased to 38.3% against 36.9% last year. While it is generally positive for the sector, it will be positive for both large companies in defence sector and component supplier like Walchandnagar, Centum Electronics and Astra.

PI INDUSTRIES

BROKERAGE : AMBIT CAPITAL

Why: The Budget was directionally positive for the agri inputs space. Gradual reduction in corporate tax rates should benefit players such as PI which pay tax at nearly full corporate tax rates. Also, the gradual move to DBT will give more money in the hands of marginal farmers and hence, bring in more efficiency in terms of using the right agri inputs.

STYROLUTION ABS, BHANSALI ENGINEERING POLYMER AND FINOLEX INDUSTRIES

BROKERAGE : RELIGARE

Why: Reduction in SAD for naphtha, ethylene dichloride (EDC), vinyl chloride monomer (VCM) and styrene monomer (SM) for manufacturing of excisable goods from 4% to 2% would benefit domestic manufacturers of polymer products such as polyethylene, polypropylene, PVC and ABS, which import naphtha and intermediates for production of polymers.