What the Budget does

• Excise duty reduced on buses and their chassis, small cars, two wheelers and three wheelers from 16% to 12% and on hybrid cars from 24% to 14%.
• Customs duty exemption to be withdrawn on naphtha for use in the manufacture of polymers in order to correct price distortions and revenue losses. Naphtha for use in the manufacture of polymers will be subjected to normal rate of 5%.
• Increased emphasis on Bharat Nirman and improving infrastructure.

Also read: How Budget affects your stocks

Impact on sector

• Reduction in excise duty on small cars, two wheelers and three wheelers will benefit paint companies, as the prices of cars will decline thereby boosting volumes.
• Increased emphasis on bolstering infrastructure in the country is a positive for companies, as it will enhance the performance of powder and protective coatings.

Major stocks:
Asian Paints Ltd
Berger Paints (India) Ltd
Kansai Nerolac Paints Ltd.
Shalimar Paints LtdB

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Image: Cans of paint sit on the floor

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