Many upcoming events have already been scheduled to affect the equity market in 2017. Some of them are smelled, factored, propagated by Investors. One of the biggie in pipeline is to welcome GST.
A tax trigger aimed to replace the current complex structure of multiple indirect taxes. With clear road map being laid down by the Finance Ministry, the Government seems on course to fast track the entire process to achieve targeted GST implementation effective 1 July 2017. Being the most sensitive market across the globe; some of the major impacts of GST are:
Sector-wise Impact of GST
Banking & Financial Services – Neutral to Positive
Investors can make fresh longs in Axis Bank, L&T Finance, Dhanlaxmi Bank for mid to long term horizon. RBL and Yes Bank shall be avoided for fresh longs.
Information technology – Neutral to Positive
Investors can make fresh longs in Infosys, Hexaware Technologies and Intellect design for mid-term investment; Wipro and TCS shall be avoided till mid of Q2.
Telecommunication – Negative
Avoid catching falling knife thus strictly avoid longs in Reliance communication and Idea, Fresh longs shall be avoided in Bharti Airtel and Tata communication; Infratel is rising star in sector & thus can be bought for long term only.
Aviation & Ancillary – Negative
Avoid fresh longs in Indigo and Spicejet; must orient to book profits in other scripts of same sector.
Paints & Adhesives – Neutral to positive
Investors can make fresh longs in Nerolac and Berger, better to stay away and watch Asian paints.
Fast Moving Consumer Goods – Neutral to Negative
Avoid fresh longs in Marico and ITC, Keep booking profits in Nestle; One can gradually go long in HUL for mid to long term horizon.
Oil & gases – Negative to deep Negative
Strictly avoid longs in Scripts like IOC, Indraprastha gas; One can wait for making fresh entry into HPCL & BPCL; Undoubtedly Reliance Industries is a pure buy for mid to long term.
Logistics & Ports – Neutral to positive
Investors can make fresh longs in Adani ports & Blue-Dart, GPPL and VRL shall be avoided for fresh longs.
Infrastructure & Reality – Positive to deep positive
Investors can pick quality script like Godrej properties and DLF, Purvankara seems to be a good bet for mid-term.
Metals – Neutral to Positive
Investors can make fresh longs in Tata steel, NALCO and JSPL; Punter picks like Bhushan and SSWL shall be avoided for fresh longs; Investors must wait to pick quality like Hindalco.
Fertilizers – Negative
Avoid fresh longs in GSFC and RCF, One can go long in NFL and Chambal for mid to long term horizon.
Power & Energy – Neutral to positive
Investors can make fresh longs in Suzlon, REC and Adani power; fresh longs in scripts like Power-grid and Tata power are to be avoided for couple of months; Script named BGR Energy is raising star and can turn to be a cash cow for Investors.
Pharma & Healthcare – Negative to deep Negative
Strictly avoid longs in Sun Pharma, Dr.Reddy and Wockhardt, can gradually go long in Pfizer and HCG.
Automotive – Deep Positive
Investor shall not miss the train of bull-run with scripts like Tata Motors, Ashok Leyland and Atul Auto from small-cap space; This resilient industry may face hurdles on end of Q2.
Summing up this impact analysis here itself.
Will be coming with more insights very soon.