i Develop Stocks Advisory

My heart is breaking...? Budget had no problem at all and has nothing to do with market correction. This is a chain reaction due to global clues. Major Broking houses have gone short in market through their proprietary trades as they are not in a position to garner retail trade. In fact, I heard one of the broker extending the logic that FM is setting wrong precedence of playing with public finances and in his opinion State Govt may now extend these kinds of things at their levels. Well, there is no stoppage to any one to give their expert comments but it is so sad that they are thinking that they have more intellect than the Hon’ble FM who is supposed to know better about the public finances. FII have bisected views as only few are negative on Rs 60k debt waiver issue but most of them are pleased with 2 issues one containment of fiscal deficit at 2.5 pc of the GDP and 2nd that for the first time F M has given stress on reducing expenditure by almost 20%. Some claim that it is impossible whereas sources close to FM say that he will do it. If he can do this it will be a major departure from all his earlier budgets. I have no doubt in my mind whatsoever with regard to the quality of the budget and even the resources required for making debt waivers of Rs 20000 crs. We are talking of really petty things now as the vision is getting junked. In my opinion this budget has potential to surprise the revenue substantially as it did last year. From 116% to 144% last year then why can’t from 118% to at least 136% that too after accounting the generous tax forgone of Rs 20000 crs on limit rise. There are not a single instance in 7 budgets presented by this JUGLLER to fail on the revenue front. In fact, in his interview post budget he has very boldly said that he has kept enough headroom to fall back on it. This clearly means that the projection of 18% is underestimated. This goes well in favour of 9% GDP growth and 35% earnings growth in case of corporates. In fact, I strongly believe that FM might surprise the street and the whole world by bringing the F D to 2.2 pc well before elections. This is possible if the revenues exceed by Rs 16000 crs. In short even after accounting the so called Rs 20000 crs (if required) plus the 6th pay commission cost Rs 15000 crs FM needs to see that the revenue exceeds by Rs 51000 crs and going by past trends it seems feasible. The savings of Rs 50000 per salaried class, new capital generation of Rs 2.5 lac per assessee and the actual beneficiary of 60K debt waivers, and 65 K subsidiary in real sense could add at least 20 bn USD as additional liquidity for spurring growth and a sum of Rs 12 to 15 bn USD could be added as contribution to revenue every year due these measures which will help the Hon’ble FM to meet his estimates. I am not aware other headroom kept by him which should be nothing less than bonus. With 9% GDP growth and 35% corporate earnings and 13 PE if FII wants to leave India I think it is sooner the better. Why has F M provided for Rs 2.75 lac crs stabilizations bonds…? Why is he holding that there might be big capital inflow….? It is open secret that the rate differentials are to stay here which means he is confident of more inflow because he says inflows could be there if the rate differentials sustains. He knows one side that RBI may not slash interest so easily due to inflation worries. He is not ready to spell the other part that about US. If FII hold view that US will start raising rates then they are to run away with the capital. We are here to express our views which we have done with rigorous intensity. However those who want to subscribe to Nifty 4400 or even below views may do it own their own. We will stick with our house policy no sell call come what it may ….? Every correction has to be used as only a buying opportunity as we still believe that we are in long term Bull Run only. “If it were not for hopes, the heart would break."