5 STOCKS THAT YOU SHOULD BUY BECAUSE OF THE BUDGET

ITC
Closing Price on July 9: Rs 1,057
Price-Earnings Multiple: 15.19
Cigarettes have been spared the routine increase in excise duty that happens in every Budget. And the overall emphasis on agriculture should benefit a company that derives around 17 per cent of its revenues from agri-business.

Bharti Tele-Ventures
Closing Price on July 9: Rs 158
Price-Earnings Multiple: N.R.*
It will benefit from the increase in foreign direct investment ceiling (from 49 per cent to 74 per cent) and from an additional year's tax holiday (Section 80-IA).

Shipping Corporation of India
Closing Price on July 9: Rs 113
Price-Earnings Multiple: 4.90
The long-pending demand of the shipping industry for tonnage tax has finally been accepted. And listed companies will derive more mileage as deferred tax liability will be phased out for them, resulting in higher earnings.

HCL Infosystems
Closing Price on July 9: Rs 613
Price-Earnings Multiple: 17.73
The Budget fully exempts computers from excise duty and this will benefit hardware companies in three ways: increase the demand for computers, divert purchasers from the grey market, and add to their profit margins.

Tata Motors
Closing Price on July 9: Rs 416
Price-Earnings Multiple: 17.29
The allowance of 150 per cent deduction for in-house R&D expenses should help this heavy R&D spender. And the reduction in peak customs duty on inputs like alloy steel, copper, and zinc from 20 per cent to 15 per cent will help it rein in overall cost.
-Narendra Nathan

5 SECTORS BLESSED BY THE BUDGET

Agriculture: The Finance Minister has sought to give the agricultural economy a fillip by focussing on rural credit, mechanisation, water management, sops for agro processing firms, and facilitating the availability of venture capital for agro-product start-ups.

Automobiles: All auto companies engaged in research in India stand to benefit from the 150 per cent exemption on in-house R&D. The 2 per cent cess will increase the prices of cars somewhat, but that is unlikely to impact the sales of passenger cars, not when financing options are cheap and plentiful. And those auto companies that have a presence in tractors can look forward to an increase in sales, courtesy the removal of excise duties on the category.

Telecommunications: Cross border acquisitions of telcos have been made easier following the increase in the ceiling on foreign direct investment (FDI) in the sector from 49 per cent to 74 per cent. Heightened investor interest is also likely to result in an increase in investments in the already booming sector.

Shipping: By acquiescing to the shipping industry's demand for a tonnage tax, the Finance Minister has helped it integrate better with the global industry (tonnage tax is the norm, internationally). The move (shipping companies can also, like in other parts of the world, choose to pay corporate tax), is also likely to result in some financial benefits for the companies.

Health: The Budget has made a clutch of diagnostic equipment and special accessories (think Braille computers, prosthetics, and the like) cheaper by exempting them entirely from customs duties.

-Shilpa Nayak