Railways Minister Suresh
Prabhu sounded upbeat through his Budget speech, which seemed to be a
crowd-pleaser with something for everyone. Industry is likely to be enthusiased
by the announcement of more locomotive factories, greater broad-gauging of
tracks, more rail track, dedicated freight corridors and electrifications – all
of which will create new demand points. Passengers will be glad at the lack of
any passenger fare hikes, while transporters and industry also didn’t get hit by
freight rate hikes. Prabhu also announced better services and employee
benefits.
Major Highlights of Rail
Budget:
1)
No Passenger Fare Hikes: In a remarkable feat of
financial balancing, Railways Minister Suresh Prabhu on Thursday left passenger
fares in both long distance and suburban trains untouched. While this will come
as a relief to passengers, it is not immediately clear whether the Minister
will be able to meet revenue targets. As he himself admitted, the Railways is
also bearing the brunt of a global slowdown and a massive payout in salaries
due to the 7th pay commission recommendations.
2) Operating Ratio: The minister is targeting an operating ratio of 92% for the fiscal year 2017, up from 90% for the current fiscal. While Prabhu has promised this despite absorption of Seventh Pay Commission guidelines, it remains to be seen how he manages, particularly given no hike in passenger fare prices.
3) Capital expenditure: 2016-17 CAPEX at Rs. 1.21 lakh crore; implementation of projects to be done through JVs with states, developing new frameworks for public-private partnerships. What will help more efficient usage of capital is the move to a paperless contracting model that will provide greater transparency in tendering and allotment of contracts, as well as reduced production cycle.
4) Dedicated freight corridors: At least 3 three new freight corridors to be developed on a priority basis. Given slowdown in economy, Prabhu says needs to build more DFCs, which offer smoother movement of goods on designated routes. Has proposed north-south Delhi-Chennai DFC; east-west Kharagpur to Mumbai; and east coast Kharagpur to Vijaywada. The east coast corridor is an important model to look at since it enhances ports connectivity.
5) Expansion Projects: The minister announced a slew of new projects, including more electrification and broad-gauging. Prabhu says the ministry will commission 2,500 km of broad-gauge lines, and electrification of 2,000 km in FY17, the outlay for which has increased by 50%. An additional 2,800 km of track will be commissioned. Broad gauge lines will be commissioned at the rate of @ over 7 km per day against an average of about 4.3 km per day in the last 6 years. This is expected to grow to about 13 km a day in 2017-18 and 19 km daily in 2018-19. The new projects are expected to generate employment of about 9 crore man days in 2017-18 and 14 crore man days in 2018-19.
OPPOSITION CALLS BUDGET “Budget of illusion “not “vision”
Conclusion:
Clearly this was not an populous budget by the BJP
Government but an budget aimed at reviving the railways by restructuring and
improving investment cycles in Indian railway looking at the condition that it
has been for some years.Inspite of increasing FDI caps, railways are unable to
get large investment from private players both domestic and foreign .This was
mainly due to global economic conditions that railways suffered in terms of
reaching fiscal targets and clearing rising NPA’s to PSU sector
involving rail mechanisms and productions and factories’ balance sheets.
SECTOR WISE UPDATION:
Infrasruture companies:
1- Lanco infra [CMP 5.32 DOWN 1.66%]
Its already trading close to its 5. If a
support of 5 is broken the stock would remain weak.Stock has resistance at 5.6
which if breached one may see next resistance at 6.1.
2- L& T [CMP 1086 DOWN 2.37%]
Its trading in a range bound area and still
looking weak. A strong support is at 1066 -1076 which if broken there will be
further panic in it. It has a resistance at 1154-59 which is a range for trend
change if breached positively.
3- GMR [CMP 11.17 DOWN 4.20%]
It is also on the downside with support at
Rs10.
Following stock can be kept in watch as there
has been announcement of increasing the number of coaches in a train. Stock has
strong resistance at 11.8 which if breached one may see upper resistance level
of 12.4-13.1 in long run.
Manufacturing companies
1. Titagarh Wagons [CMP113.35 DOWN
8.40%]
It has a support of 114.5-112, if it
maintains the support there can be a rally up, but if it breaks the support one
can see further panic in it.It almost broke 10 % today.It is very weak on
charts and oversold.
2. Voltas [CMP 223.5 DOWN 4.14%]
It is providing AC infrastructure for the
railways. The stock has a support at 215 levels. The stock remained weak and
fell more than 4 %.It has a strong resistance of 240-250.which stock is not
going to breach as it is witnessing selling pressure.
3. BEML [CMP 976.65 DOWN 4.06%]
BEML is one the few stocks which was holding
strong but fell 3% after the budget.IOt has an strong resistance at 1038-43
which if breached one may see next resistance building at 1134.
Logistics companies
1. Alstom India [CMP 569.05 UP 1.60%]
This is the only stock which remained in
positive today gaining 8 points .It has a crucial support at 560. If it
maintains this support we may see a upside rally in this or if breached it can
see panic to its next support level of 543.
2. Navkar Corp [CMP 158.4 UP
2.39%]
Navkar corp maintained its support of 150 and
closed at 158. It has its all time support of 150 which it needs to maintain
for an up rally is to be expected.
Railway stocks In news today:
Kalindee
rail
Container
Corp
KEC
Intl
ARSS
Infra
Transformers
Titagarh
wagon
Lanco
Infra
GMR
Infra
Stone
india
Texmaco
Rail
Concor
Gateway
Distiri
Navkar
Corp
Seimens
ABB
India
Alstom
India
Zicon
Nelco
BEML
More will be update during tomorrow's trading session!!
