Fri. Mar 29th, 2024
stock-market

The government, in order to stabilise rupee, hiked the import duty levied on 19 selected products. This is also likely to narrow the current account deficit (CAD) which has been widening due to global trade crisis.

Here is the anticipated trend of 16 stocks which will get impacted the most :

  • Blue Star and Voltas

Indian manufacturers including Blue Star and Voltas rely on imports and increase in customs duty of compressors along with outdoor, indoor and completely built units will force these manufacturers to start looking for the replacement of import in the domestic market.

  • Whirpool and Havells India

Whirlpool has set up a manufacturing facility in India and isn’t dependable on imports for production. It is less likely to get impacted by the import duty hike. Although, it imports 400 litres range which is the only thing to be affected for now.

On the flip, Havells India imports 70% of its requirements from Llyod and thus the government’s move is likely to turn negative for the company. It may start shifting to domestic manufacturing.

  • MRF, Apollo Tyres, CEAT, JK Tyres

The decision is in favour of tyre companies like MRF, Apollo Tyres, CEAT and JK tyres as the import is recorded only 13% of the domestic FY18 sales volume. Reportedly, the revised basic import duty on the tyre is 10%.

  • IOC, BPCL, HPCL, Jet Airways & SpiceJet

Aviation stocks like Jet Airways & SpiceJet may go under pressure as the government has raised 5% duty on aviation turbine fuel (ATF). This will make airfare costlier. On the contrary, stocks of oil marketing companies like IOC, BPCL and HPCL are most likely to witness a positive trend as they might increase their margins.

  • Bata India; Relaxo Footwear

The increment in footwear’s customs duty from 20% to 25% is a positive sign for stocks like Bata India and Relaxo Footwear

  • Titan Company

There is no revision in import duty on gold although the government has hiked import duty on jewellery pieces which is likely to reduce competition. Latest media reports by Money Control suggested that Titan’s share jumped 3% in the early trade soon on Thursday as there are no changes in import duty levied on gold.

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