Budget 2014: Auto sales likely to get a boost
Auto analysts believe that sales volume of the automobile companies will get a boost after finance minister left more money in hands of salaried employees.
Arun Jaitley, union finance minister hiked the personal income tax limit to Rs2.5 lakh from Rs2 lakh and limit under 80C of income tax has risen by Rs50000 to Rs1.5 lakh, while presenting his maiden union budget.
These two measure announced in budget would led to approximately Rs10000-30000 more money in hand of salaried employee, and this could likely to boost convalescing sales volume of the auto companies.
“Hike in personal exemption limit and higher income tax would leave more money in hand of prospective customer. This would certainly boost sales volume of two-wheeler and hatchback passenger cars”, said Basudep Banerjee, auto analyst of Antique stock broking. He added, “Post budget announcement two-wheeler volume likely to grow by 12% from earlier estimate of 8%.
Companies such as Hero MotoCorp, Maruti & TVS Motor will be key beneficiary of budget announcement”.
The acceleration in automobile sales for the second successive month in June has already led analysts to revise their estimates for sales volume growth of automakers for the current financial year as well as the next. Government impetus and improving sales volume may trigger another round of earnings upgrades of stocks of automakers.