Auto 4,861.15 +2.86%
May 02, 15:46
Post-budget analysis
What the Budget does
# Reduction in excise duties from 16% to 12% on manufacturing of 2&3 wheelers, buses and small cars
# Agricultural credit outlay increased to Rs 2,80,000 crore
# 10% increase in defence sector allocation to Rs 1,05,600 crore
# Dividend tax paid by parent company allowed to be set off against the same paid by its subsidiary
# Higher allocation towards road development programme such as the NHDP.
Impact on sector
# Excise duty reductions will help lower prices and stimulate demand for 2&3 wheelers and small cars
# Increased demand for new buses from STUs (State Transport Undertakings) as well as private players
# Higher defence allocation will spur investment in new vehicles
# Higher agricultural credit outlay will help boost demand for tractors
# Increased thrust on road infrastructure is a positive for all the automobile manufacturers especially passenger vehicles and CVs
Impact on companies
# 2&3 wheeler makers like Hero Honda, Bajaj and TVS Motors to benefit from reduction in excise duties
# Small car players like Tata Motors and Maruti will reap the benefit from small cars excise duty reductions
# Ashok Leyland and Tata Motors, the leading bus manufacturers will benefit from excise duty reductions on buses
# Suppliers to the defence sector like M&M and Ashok Leyland to benefit from higher defence sector allocation
# Increased agriculture credit outlay will benefit two-wheeler makers as well as tractor manufacturers like M&M and Punjab Tractors.
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