-------- Forwarded Message --------
Subject: GST: Could Be A Game Changing Event For India---Exide May Be
One Of The Beneficiary
Date: Wed, 12 Aug 2015 08:36:52 +0530
From: Asis Ghosh <asis...@gmail.com>
Reply-To: asis...@gmail.com
To: undisclosed-recipients:;
After a long long delay of around 15 years (after first planned by the
then NDA govt in 2000 and first introduced in Parliament in the year
2007-08), there is a high probability that GST bill may be passed in our
RS by today/tomorrow amid various political permutations & combinations
with non-stop drama. Most probably some opposition parties will "walk
out in protest against so called Lalit Modi fiasco & Vypar Scam" paving
the way for an abstain in RS voting (indirect support) & with some
oppositions will likely prefer to vote in favour directly. This will
make some opposition parties to be alive politically outside parliament
also.
The GST is itself a game changer if implemented all over the India in
the right form and as par various calculations, GST will itself add
around 1.5-2% to our current GDP of around $2 trillion by FY18, because
it will increase exports, domestic sales and create more employment and
overall growth. GST is scheduled to be implemented wef FY16 onwards.
We now currently pay around 25-30% on an average on various goods &
services which may be clubbed into a single revenue neutral GST rate of
around 20% in the days ahead. Apart from one time short term benefit of
reduced tax burden (which will be ultimately passed to the consumers due
to competition), in the long run both manufacturers & consumers will
gain because of reduced tax burden in inputs and outputs, sales will
increase.
Also, due to overall higher tax revenues (about 1% of our GDP), India's
fiscal deficit will improve too.
As par various analysts following sectors and scrips may benefit
immensely from the implementation of GST: (Source:ET & Others)
1. Ceramic Tiles: Like Kajaria Ceramics
2. Consumer Durables: Like Bajaj Electriacls, Havells, TTK Prestige
3. FMCG/Packaged Foods: Like Britannia, Dabur, ITC, Jub Foods, Marico
4. Apparel: Page, Raymonds
5. Batteries: Exide, Amara Raja
6. Logistics: Gati, Patel Logistics
7. Auto: Like M&M, TATA Motors
8. Cement & Steel: ACC, Tata Steel etc
But some of the stocks has already rallied for the expected event and
may see profit booking once GST passage is announced (like Buy in rumour
and sell after news)---so we need to check the technical of the above
stocks for any further significant upside or not as ultimately time &
price of a stock is the ultimate.
*Exide is one of the stock, that may be benefited by GST:*
*Exide: 159 (CMP): Buy Around 156; It May Fly To 187-205 (Only
Sustaining Above 162)*
Technically, 156 is a good support zone for Exide and consecutive
closing above 162, it may scale up to 187-200 in the near term.
For short term trader, SL could be placed below 153.
On the flip side, sustaining below 153, Exide could fall up to 141-130
area, where it may be further accumulated for portfolio investment purpose.
Recent Q1FY16 result was below market expectations amid lower sales in
inverter/automotive/industrial battery sales and higher input costs &
taxes.The company also slashed the dealer incentive and increased the
dealer networks, which ultimately proved costly.
Going ahead, the company is taking necessary corrective steps for its
marketing strategy and it sees better demand for automotive & industrial
segment due to expected growth in 4W segment (for 7-th Pay Commission)
and expected overall economic recovery in H2FY16.
Although, there is subdued demand for household inverter battery in big
cities & large towns due to comparatively better power conditions (less
load shedding/power cut due to lack of demand from industrial
sector---currently power is in excess supply than demand in India and
there is power back up system in most of the modern city housing
society), in small towns and stand alone houses, inverter is still in
demand due to frequent power cuts amid poor distribution networks of SEB(s).
As par BG metrics of techno funda valuation model, current median value
of Exide may be around 175 and projected fair valuations are 195-215-235
(FY:16-18).
SCRIP EPS(TTM) BV(Act) P/E(AVG) LONG TERM SHORT TERM MEDIAN
VALUE 200-DEMA 10-DEMA
EXIDEIND 6.07 47.44 31.31 174.76 170.53 172.65 160.7 153.02
EXIDEIND 7.5 51.75 31.31 194.26 189.56 191.91 160.7 153.02
EXIDEIND 8.9 56.45 31.31 211.61 206.50 209.05 160.7 153.02
EXIDEIND 10.75 61.75 31.31 232.57 226.94 229.76 160.7 153.02
_*Technical Charts & ET IMAGE FOR GST BENEFICIARY LIST:*_
<http://3.bp.blogspot.com/-yUyEIsQ0NeE/Vcq04ZynReI/AAAAAAAADuc/1LxxSllBdBI/s1600/EXIDE-10-08-2015.png>
<http://1.bp.blogspot.com/-vyuB2kw5F_A/Vcq056w7z0I/AAAAAAAADuk/qmn2MV49l9Y/s1600/EXIDE-FIBB-10-08-2015.png>
<http://1.bp.blogspot.com/-7wS9tyNPbU8/Vcq08H1wNHI/AAAAAAAADus/6KGiUWN1sUA/s1600/EXIDE-PATTERN-10-08-2015.png>
<http://4.bp.blogspot.com/-FL4_uBoyvYA/Vcq1Aj0HfRI/AAAAAAAADu0/VIUrKpNiViw/s1600/GST-ET%2BList.jpg>
--
Thanks & Regards,
Asis Ghosh
(NCFM-TA Certified)
--
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