FMCG and Media – Budget Spotlight

WHAT TO EXPECT FOR THE FMCG AND MEDIA

SECTOR?

Spotlight: FMCG and Media Sector

By Ritwik Rai, Research Analyst

• Broadly, the key impact of the budget is likely to be on the cigarette companies. We are expecting excise duties on cigarettes to be raised 12-15% that will impact several companies such as ITC, Godfrey Phillips and VST Industries.

• There can also be modest impact on certain other companies on account of higher excise duties.

• Thrust on rural growth is likely to remain, however, growth in expenditures on schemes such as NREGA may be weakened.

• Changes in income tax slabs can benefit consumer companies, especially those with greater exposure to urban areas.

FMCG SECTOR

• Budget assumes significance for this sector in the light of switchover to Digital Addressable System (DAS)

• There is likelihood that several demands from distribution entities (cable/ DTH) will be addressed in the budget like:

i. Changes in foreign ownership limitsii. Infrastructure status to cable companiesiii. Tax exemption on set-top boxes

• Addressing the above demands could prove to be a positive sign for Direct to Home (DTH) and Multi System Operators (MSOs) including Dish TV, Hathway Cable and Datacom, WWIL, Den Networks

• There is ray of hope for Broadcasters as they may become the indirect beneficiaries

MEDIA SECTOR

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