Rail Budget 'constructive,' F&O expiry hurts; buy on dips: Parag Thakkar, HDFC Securities

In a chat with ET Now. Parag Thakkar of HDFC Securities shares his views on the hike in freight rates.

ET Now: From a market standpoint, there is a pressure because of the freight rate hikes coming in. It would hurt companies from steel, power, fertilisers and cement sectors. Would it be significantly detrimental for their margins?

Parag Thakkar: For cement, the impact would be just below 3 per cent, for urea it is 10 per cent and for coal it is 6.3 per cent.

ET Now: Rise in freight rates for coal is the key concern, right?

Parag Thakkar: It will affect, but overall what I feel is that the Railway Budget was very constructive with planned expenditure going up significantly to Rs 1,12,000 crore — 41 per cent of that is coming from the budget.

In addition, freight carrying capacity is envisaged to go up by 50 per cent. Therefore, we believe it is a good Budget.

It is only that stock prices had gone up significantly especially in last two weeks. This has resulted in some profit taking. I feel that today’s selling is more of what I would say expiry-related selloff which one should utilise to buy.