Stocks and Company Impact Analysis

Focus on health spending a positive. Despite weakness in the US business this quarter, management has reiterated its US revenue guidance of USD400-500m by FY24, India business delivered strong growth of 14% YoY in 3Q. Budget likely positive.

Consumption, economic recovery to boost. Sales are gradually recovering for Avenue Supermarkets, with 3Q sales up 10% YoY vs decline of 34%/12% in 1Q/2Q.

Economic recovery, consumption to boost sentiments. Tyre industry volumes have recovered faster than our earlier expectations due to better than expected ramp-up in volumes in both, the replacement and OE segments.

We had already upgraded FY21/22/23 EPS for Crompton by 1/6/5%, owing to faster than expected volume-based recovery in ECDs, along with share gains. Budget led economic recovery will aid this stock.

Like other consumer sector stocks Budget is positive for Emami, which may do better that peers if we consider recent performance in Q3, where volume and sales grew 13% and 15% respectively better than market view.

Budget is largely positive for HUL as it is likely to boost consumer spending and benefit HUL. Our target is unchanged.

The FM proposed increasing the FDI limit in insurance to 74 per cent in the Budget from 49 per cent. This is positive for the sector and ICICI Pru is also likely to gain along with the sector stocks.

The stock will significantly benefit from infra push. The 3Q earnings were already higher than estimates, on better realisations. FY21 sales guidance of 15mt is on track.

Budget positive for Jyothy Labs. We expect to see consistent performance in dishwashing, acceleration in personal care and recovery in fabric care.

Banking sector one of the biggest beneficiaries of the Budget. Kotak to outperform being one of the best placed banks in the banking universe.

Massive infra push and intent to help L&T and is expected to bounce back to normalcy in 4Q.

With make in India – Atmanirbhar focus we see continued strong growth in Specialties for 4QFY21 as well as FY22, while CRAMS revenues are also seen sustaining. Positive for Navin Fluorine.

Economic recovery theme in Budget to help. Having performed commendably in 1HFY21 by cutting costs to protect earnings while also deleveraging the balance sheet by half, Quess is now on track to nearly triple EPS over FY21-23ii.

Farm sector focus positive. We have already raised FY21-23 EPS by 12-22% after much better-than-expected 3QFY21 results. Margins in the Crop Care business also surprised positively.

We had already upgraded RIL’s consolidated FY21/22/23 EPS by 5/2/2%, on the back of Jio, retail performance; lower tax rate, and higher treasury. Budget-led economic recovery to boost RIL.

To gain along with other insurance stocks owning higher FDI in sector. It remains our top pick for 2021 as its distribution channel comes back full force and the product mix stabilises with rise in share of protection.

Budget is positive. Siemens’ FY20 ARA highlights the growing penetration of digitalisation across various sectors during the pandemic and the company’s long-term target of introducing next-gen clean technologies in the country.

Budget-led Atmanirbhar focus to help.

Another stock to benefit from infrA push. The company already expects the demand momentum to sustain, with rural demand continuing (good crop) and urban-housing picking up.

Expected economy recovery to help V-Mart’s which already has a value retail model of cluster-based expansion in small towns, low price, high throughput, low operating cost and low capital employed generates ~ 20% post-tax RoIC.