Fundamental stock market expert SP Tulsian of sptulsian.com shared his view on certain stocks and the impact they see due to various announcements made in the budget 2020.

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In an attempt to boost consumption, the FM in the budget announced a new tax regime for the middle-class which would leave more money in his hand. On the back of this the FMCG stocks rallied on Monday with HUL in the lead.

According to Tulsian, with more money into the hands of the middle-class. For example if HUL is declaring dividend of Rs 30 of which Rs 8 used to go towards dividend distribution tax and Rs 22 to the shareholder, now the entire Rs 30 will come into the hands of the shareholders, so dividend yield gets increased. So, if you take 25 percent as ballpark and use the same yardstick then the dividend payout by all the companies will increase by 25 percent. So those which are in the high dividend paying bracket will stand to gain.

Moreover, post rabi harvesting, we could see a huge consumption growth coming in. So taking the combination of all these factors, we are seeing a move in the share price of all the fast moving consumer goods (FMCG) stock and especially in Hindustan Unilever (HUL),” he added.

Tulsian is a well-known analyst with more than three decades of experience and has an acute sense of logic and is respected for his frank and forthright views.

On banking space, he said, “Having seen the results of all 5 banks – Kotak, HDFC Bank, ICICI Bank, Axis Bank and SBI there is nothing wrong except maybe in case of Kotak because of the credit growth. We had taken the call when it moved to Rs 1,700 post RBI directives or having relaxation being given and had advised to exit from the stock but now we are taking a positive and buy call.”

“We had also given a sell call in HDFC Bank about a month back at Rs 1,300 plus. Now the stock having corrected sub-1,200 maybe around Rs 1,185-1,190 it is seen as a most screaming buy because we have not seen any kind of complaint coming in,” said Tulsian.

“Even in ICICI Bank, hedge funds are seen to be too active - they swiftly get into the stock and get out as well and on alternate days, the stock is seen rising, correcting, rising. Therefore, there is more comfort in HDFC Bank for an investor but all four that is HDFC Bank, ICICI Bank, SBI and Axis Bank qualify as an investment at the current level,” he further added.

In the budget although white goods saw an increase in customs duty, washing machine has not attracted a customs duty. So, IFB Industries looks good. “The company will be starting its own AC manufacturing plant in next 15 days-one month; earlier it used to import. They are leaders in washing machines, which has not seen any increase in the custom duty, so that is seen positive," said Tulsian,

Therefore, one needs to take a call on the stocks like Whirlpool, Voltas, Blue Star, but I have to pick up one stock then it would be IFB Industries although I am keeping positive bias across the board on the companies who have their own manufacturing base in India created in the last 6-12 months,” Tulsian added.

First Published:Feb 3, 2020 4:26 PM IST