Extension of mega power project status to other existing projects will lead to lower effective pricing, as incentives on customs and licencing are availed of by the power projects.
Marginal impact at best of a reduction in customs duty from 25 per cent to 5 per cent on high voltage equipment.
Most of high voltage equipment is imported with ABB having a minimal exposure to the segment.
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Surcharge on diesel may impact movement as equipment is transported from factory to site. Also, there may be greater competition.
Asian Paints
The reduction in customs duty on paints will not have any major impact on paint producers, as the quantum of imported paint is insignificant.
The reduction in customs duty on key inputs such as titanium dioxide and phthalic anhydride will have a positive impact on the operating margins of paint players.
In paints, raw material costs account for approximately 65-70 per cent of the cost of production and around 40 per cent of the raw material requirements are imported. Asian Paints imports as much as 45 per cent of its total raw material requirement. Thus, the company stands to benefit immensely in terms of lower raw material costs.
Ballarpur Industries
Decline in customs duty from 35 per cent to 30 per cent on value-added paper like coated paper, maplitho and duplex board to impact the company as domestically manufactured paper prices of above value-added paper move in line with landed costs and hence will impact the company due to increased competition from imports.
Value-added paper contributes around 25 per cent to the company