What the Budget does

• Aluminium metal scrap to be exempt from customs duty
• Continuation of power sector reforms
• Excise duty reduced on manufacturing of automobiles of certain specifications
• Coal regulator to be appointed to oversee allocation of coal blocks
• Encouragement to usage of green technology
• Dividend tax paid by parent company allowed to be set off against the same paid by its subsidiary

Also read: How Budget affects your stocks

Impact on sector

• While reduction in customs duty on aluminium metal scrap is positive for certain secondary aluminium manufacturers, it is negative for ingot manufacturers like NALCO and HINDALCO [Get Quote]
• Increased investments in T&D will help boost demand for aluminium as the electrical sector is the major consumer of aluminium in the country
• If the auto players pass on the reduced excise duty benefits, it will help spur auto demand, which in turn would drive demand for aluminium based auto components
• Promotion of green technology will lead to demand shift towards aluminium owing to its environment friendly qualities like lower weight and better strength
• The proposed coal regulator will help ease the process of allocating coal blocks, a key feedstock for captive power plants

Impact on companies

• Companies like NALCO and HINDALCO will be positively impacted due to greater demand from sectors like auto and power
• Customs duty exemption on aluminium metal scrap is likely to make its cost more competitive vis-�-vis the ingots being manufactured by NALCO and HINDALCO

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