Have you put your money in stocks and/or mutual funds? The Budget often impacts the bottom lines of industries and companies — and can make a difference to your investments. TOI commissioned CRISIL — a global analytical company providing ratings, research, and risk & policy advisory services — to analyze how your market wealth could be impacted.
AIRLINES
STATE OF THE INDUSTRY: Domestic air passenger traffic is likely to increase 18-20% in 2015-16 on improving economy, low fares and better connectivity.In the next financial year, a relatively moderate growth of 12-14% is expected on a higher ba se. Lower crude oil prices and better passenger load factors are likely to improve operating performance over the next two years.
How Budget 2016 will impact your investments in stocks and mutual funds
BUDGET IMPACT: An excise duty hike on aviation turbine fuel (ATF) to 14% from 8% would be marginally negative for airlines as ATF accounted for 30% of their operating cost in the third quarter of 2015-16. A proposed equity infusion of Rs 1,713 crore in Air India will not be enough as it remains over leveraged with an estimated debt of Rs 40,000 crore.
Exemption of excise, customs and countervailing duties on certain inputs procured by the maintenance, repair and overhaul industry, could lower maintenance expenses of airlines. Simplification of customs baggage rules for international passengers is likely to boost travel. Introduction of Krishi Kalyan cess of 0.5% on taxable services is seen as marginally negative.
