homemarket NewsGovt may find it tough to maintain fiscal deficit at 3.4%, says Mukul Kochhar of Investec Capital
Govt may find it tough to maintain fiscal deficit at 3.4%, says Mukul Kochhar of Investec Capital
Most of the announcements on the budget side will come on the policy front and one should expect the government to continue spending on the infrastructure side, a market guru has observed.
It will be difficult for the government to maintain the 3.4 percent fiscal deficit target, a stock market expert has said.
In a interview with CNBC-TV18, Mukul Kochhar, Co-Head, Equities, at Investec Capital Services shared his views on the fundamentals of the market, specific stocks and sectors.
“Even when the interim budget was presented, there was clear pressure on the revenue side of the projections. Even at that time it looked like meeting the 3.4 percent fiscal target would be difficult especially because the Rs 75,000-crore income guarantee clause was inserted at the last moment. Clearly there was stress on the expenditure and the revenue side, which should become evident as the final budget is presented,” he observed.
Speaking about his expectations from the upcoming Union Budget, Kochhar said: “Most of the announcements on the budget side will come on the policy front and here you should expect the government to continue spending on the infrastructure side because that is the only way we can encourage manufacturing in this country. So, we continue to be encouraged by the level of infrastructure spending that will take place in the country and that is what we will look forward to in the budget as well.”
According to Kochhar, while investing in the stock market, one should keep an eye on the entry price. As long as the pricing is right, one should start buying the stock.
Kocchar is cautious on Maruti Suzuki given the risk to its market share. “We downgraded the stock recently and we hold on to that fact. It is not the cyclical downturn that I am worried about, the penetration of cars in India is too less for me to start thinking that growth has gone permanently. I think growth will come back. The bigger question now for Maruti is when growth comes back, will it be maintaining the kind of market share that it has and that is the incremental question that makes me a little cautious,” he said.
“On the two wheeler side the opportunities are a little better. There we are constructive on Bajaj Auto, and TVS Motors has also started looking fine to us. Valuations are a little more attractive there,” he added.
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