Union Budget 2010: Banking sector to benefit from lower fiscal deficit, says Angel Broking

Before the Budget, you said that, IVRCL, IRB and HCC are to benefit from the government’s thrust on roads. Would you like to make any other stock calls after the Budget?

If you look at overall Budget proposal, banking will benefit a lot from lower fiscal deficit. So there will be lots of liquidity in the system. Government borrowing would not be crowding this area. So you will see interest rate coming down and putting more funds in the hand of individual who will demand this credit growth.

Apart from this, we have been seeing that industry is coming to a zone where actually that turnover is coming to an area where they will start again building their capacity. Right now it is somewhere near 1.7 or 1.8, which is near to historical high what this industry was having.

So softening of interest would be overall good for banking. Market was expecting there would be hardening but somewhere I feel that interest rate coupled with more disposable money in the hands of consumer will see a big benefit for this sector.