Jul. 3, 2009 (The Hindu Business Line) --
The Sensex surged 254 points on Friday following the announcements made in the Railway Budget.
“If the Railway budget gave some hint to what could be expected in the Central Budget on Monday, it is clearly tilting towards populism. The Railway Budget has promised a lot to improve railway infrastructure, network coverage and amenities, but no clear measures have been announced regarding the timeline of investments and actual actionable measures. To that extent it is a wish list without much detail,” Mr Amitabh Chakraborty, President (Equity), Religare Capital Markets, said.
Ms Rohini Malkani, Economist, Citi (NYSE:C) India, said: “While proposing to introduce new trains, modernise stations, purchase wagons and extend the dedicated freight corridor, the inclusive growth mantra and softer issues appear to be the underlying theme.”
Mr Dinesh Thakkar, CMD, Angel Broking, said: “Though no major policy initiatives were announced, adopting the private-public partnership approach for development of railway infrastructure is a step in the right direction. Further, identification of four dedicated freight corridors to be developed at an accelerated pace would provide a fillip to trade through rail and benefit the logistics industry. The Budget has been a non-event from the markets perspective but definitely a step in the right direction for the country.”
Mr Gopal Agrawal, Head of Equity at Mirae Asset Investment Management, said there is a concern on how the revenue generation will pan out.
According to ICICI Securities, some of the companies that will benefit from the announcements made on Friday are NTPC, BEML, Titagarh, GVK Power and Infra, Concor and Kalindee Rail. Mr Gaurav Dua, Head-Research, Sharekhan Ltd, said “The Railway Budget is more reformist than populist. Rather than the giveaways in form of lower passenger tariffs, the focus is on productive utilization of spare land and develop infrastructure railway infrastructure under the public private participation model. No increase in freight tariffs is also positive for many core sectors like steel, cement etc.”
“The railway budget had many news to cheer like the adding of near to 18000 wagons in FY-2010 compared to around 10,000 wagons in FY-2009 making stocks like Titagarh Wagons, Kalindee Railway Nirman, BEML etc to benefit from this move, Rs 25 pass/100 kms to individuals earning Rs 1,500 a month, more trains to states, food at cheaper rates on trains and at stations, safety features to be up the table, using railway land bank for productive purpose etc. In the afternoon session, the markets moved towards the days’ high on expectation of an even more favourable Union budget, which will be announced on Monday,” said Mr Alex Mathews Head, Research Centre – Geojit BNP Paribas Financial Services Ltd.
