Union Budget 2020, Economic Survey Highlights, and Top Cues in Focus Today

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India share markets witnessed selling pressure during closing hours yesterday and ended their day on a negative note.

At the closing bell yesterday, the BSE Sensex stood lower by 190 points (down 0.5%) and the NSE Nifty stood down by 73 points (down 0.6%).

The BSE Mid Cap index ended down 0.6%, while the BSE Small Cap index stood down by 0.3%.

Stocks in the oil & gas sector and metal sector witnessed huge selling pressure, while telecom stocks were trading in the green.

Speaking of Indian share markets, with the Union Budget just around the corner, the business media is already going berserk with budget related headlines.

Not to mention the numerous budget wish lists out there which give rise to speculation about their impact on the stock markets if they were to come true.

There are various things written in the media about the upcoming budget. Some want income tax cuts to revive the economy. Some want other freebies to revive consumption.

As per Tanushree Banerjee, all these are good but short-term solutions. As per her, if the government could focus on one thing, it should be the real estate sector in tomorrow's budget.

Real Estate - The Sector to Bet on After the Budget?

Here's what she wrote about it in today's edition of The 5 Minute WrapUp...

• Demonetisation, RERA, and the IL&FS crisis have hit the sector hard.
  
  The BSE Realty Index has had a tough time in the last few years.
  
  But there are signs of a turnaround. The government's Rs 250 billion package was a much need boost for the sector and homebuyers.
  
  A real estate revival is important for the steel, cement, and many other sectors. It is also an important job creator for India's young population.

A strong focus on reviving real estate will provide a much-needed boost for the Indian economy.

We will be sharing the highlights and our view on the budget here. Stay tuned!

Until then, you can watch the video below where Tanushree shares how you should react to the Union Budget announcement.

December Quarter Result Announcements

From the automobiles sector, Tata Motors reported a net loss of Rs 10.4 billion for the quarter under review as compared to net profit of Rs 6.2 billion for the same quarter in the previous year.

Total income of the company decreased by 32.1% at Rs 111.9 billion for Q3FY20 as compared Rs 164.8 billion for the corresponding quarter previous year.

On the consolidated basis, the company reported a net profit attributed to the shareholders of Rs 17.4 billion for the quarter under review as compared to net loss of Rs 269.9 billion for the same quarter in the previous year.

Total income of the company decreased by 6.5% at Rs 725.8 billion for Q3FY20 as compared Rs 775.8 billion for the corresponding quarter previous year.

To know more about the company, you can read Tata Motors' latest result analysis on our website.

From the banking sector, State Bank of India reported a healthy 41% year-on-year (YoY) growth in profit at Rs 55.8 billion for the December quarter, boosted by lower provisions.

The growth in highest ever quarterly profit was also driven by recovery from bad accounts (including Essar Steel), NII, other income and operating income. It, however, was capped by higher tax cost.

The bank in its BSE filing said that during the quarter it exercised the option of lower tax rate taking a one-time hit of Rs 13.3 billion. Excluding the impact of this one-time additional hit, net profit in Q3FY20 would have been Rs 69.1 billion.

Net interest income during the quarter grew by 22.42% YoY to Rs 277.7 billion, with loan growth of 7.4% YoY.

Deposits growth during the quarter stood at 9.92%, with current account deposits growing 9.27% and saving bank deposits 8.19% YoY.

From the FMCG sector, Colgate reported a 3.6% increase in net profit at Rs 1,991 million in the quarter ended December 31, 2019.

The company had posted a net profit of Rs 1,921 million in the same quarter a year ago.

Total income during Q3FY20 stood at Rs 11,529.7 million as compared to Rs 11,072.6 million in the year-ago quarter, a growth of 4.1%.

Volume growth of the company slipped to 2.3% as against 4% seen in the September quarter.

The company said the relaunch of its flagship brand, Colgate Strong Teeth has helped gain household penetration and its new Charcoal variant has seeing early traction with consumers in the markets where it has been launched.

Economic Survey 2020

Finance Minister Nirmala Sitharaman yesterday tabled the Economic Survey 2019-20 in the Parliament after a joint address by President Ram Nath Kovind to both Lok Sabha and Rajya Sabha.

Prepared by Chief Economic Advisor (CEA) Krishnamurthy Subramanian, the Economic Survey gives a review of the developments in the economy over the previous 12 months and also gives an outlook for the next financial year.

Here are some key updates of Economic Survey 2020:

There is need to bring in a distinction between hoarding and storage of food grains, this will play an important role in doubling farmers' income.

To achieve the target of doubling farmers' income by 2022, the Economic Survey said there is an urgent need to address some of the basic challenges like credit, insurance coverage and irrigation facilities in the agriculture and its allied sectors.

On the GDP front, it said that concerns of a misestimated Indian GDP are unsubstantiated by the data and are thus unfounded.

On employment, it stated the government can create 40 million jobs by 2025 and 80 million jobs by 2030 by focussing on exports.

Talking about the business cycle, CEA said that it seems like we have hit a trough (in the business cycle) now and there should be an uptick. The CEA also presented plan for India to get into the top 50 of Ease of Doing Business ranking.

The Survey stated that to make India a US$ 5 trillion economy by 2024-2025, India needs to spend about US$ 1.4 trillion during the period on infrastructure so that lack of infrastructure does not become a constraint to the growth of Indian economy.

On the stock markets front, the change in composition of Sensex shows that pro-business policies give a level playing field, providing opportunities to all and keeping incumbents on their toes.

It would be interesting to see how these developments pan out in the coming months. Meanwhile, we will keep you updated on all the news from this space. Stay tuned.

Railways Sector: Budget Expectations and Global Firms Queue Up to Run Private Trains

Moving on to news from the railways sector, as per a leading financial daily, the government's attempt to let private companies run passenger trains has attracted more than two dozen firms, including global majors Alstom Transport, Bombardier, Siemens AG and Macquarie.

As per the article, companies such as Adani Ports & SEZ, Indian Railway Catering and Tourism Corporation (IRCTC) and KEC International have also shown initial interest in the government's plan to let private firms run trains on 100 routes.

As many as 150 modern trains will be run by private operators across 100 routes, offering world-class technology and services to passengers.

The Railways currently runs 13,000 passenger trains. However, a total of 20,000 trains will be required to meet growing passenger demand, Railway Board chairman Vinod Kumar Yadav told reporters on Wednesday.

Meanwhile, Finance Minister Nirmala Sitharaman in her Railway Budget 2020 speech, as part of the Union Budget 2020 speech, may announce an increase in the capital expenditure for Indian Railways.

In the last year's Union Budget, Indian Railways received a budgetary allocation of Rs 658.4 billion and the highest ever outlay of Rs 1.60 lakh crore.

For the fiscal year 2019-2020, the budget had pegged the investment requirement for Indian Railways at Rs 50 lakh crore over a period of 12 years. Last year in December, Nirmala Sitharaman had unveiled a 102-lakh crore national infrastructure pipeline in which the railway projects will be accounting for Rs 13.7 lakh crore.

Union Railway Minister Piyush Goyal recently discussed the plan of electrification of railways and the huge investment opportunity that it presents at the recent World Economic Forum in Davos, Switzerland.

Earlier this month, Piyush Goyal stressed the need for a public-private partnership (PPP) funding model for the railway sector as the big investments will be impossible through government and railway budgets.

How all this pan out remains to be seen. Meanwhile, we will keep you updated on the latest developments from this space.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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