🏵 GST Council Meet
✅ GST Rate for Affordable Housing reduced to 1% without ITC.
✅ GST Rate for Non-affordable Housing reduced to 5% without ITC.
✅ Definition of Affordable Housing -
Non-metro : 90 Sq mtrs
Metro : 60 Sq mtrs
Cost cap - 45 lakhs
Effective date: The new rate shall become applicable from April 01, 2019.
✅GST exemption on TDR/ JDA, long term lease (premium), FSI Intermediate tax on development right, such as TDR, JDA, lease (premium), FSI shall be exempted only for such residential property on which GST is payable.Details of the scheme shall be worked out by an officers committee and shall be approved by the GST Council in a meeting to be called specifically for this purpose.
✅Details of the scheme shall be worked out by an officers committee and shall be approved by the GST Council in a meeting to be called specifically for this purpose.
✅Advantages of the recommendations made:The new tax rate in principle was approved by the Council taking into consideration the following advantages:-
The buyer of house gets a fair price and affordable housing gets very attractive with GST @ 1%.
Interest of the buyer/consumer gets protected; ITC benefits not being passed to them shall become a non-issue.
Cash flow problem for the sector is addressed by exemption of GST on development rights, long term lease (premium), FSI etc.
Unutilized ITC, which used to become cost at the end of the project gets removed and should lead to better pricing.
Tax structure and tax compliance becomes simpler for builders.
✅GST Council decided that the issue of tax rate on lottery needs further discussion in the GoM constituted in this regard.
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💡Capital Market Updates
✅ Action Construction Equipment posted strong numbers for 9MFY19. Buy for the long term.
✅ IPCA Laboratories posted 52% higher PAT for Q3 at Rs.160 crore. With improving fundamentals, its future looks bright. Buy.
✅ Paper industry boom is around the corner. Buy JK Paper available much below its intrinsic worth. It reported higher Q3 revenue and profitability.
✅ Lux Industries is moving up the ladder after two acquisitions. Its EPS jumped from Rs.7.3 in Q3FY18 to Rs.9.6 in Q3FY19. Buy.
✅ Aluminium major, Hindalco Industries, posted 8% higher income of Rs.11938 crore with 47% higher PAT of Rs.713 crore. A big buy!
✅ Tech Mahindra has approved a buyback at Rs.950/share. Buy immediately.
✅ Global ratings agency Moody’s has upgraded Tata Steel's corporate rating to stable. With improving prospects, the stock looks good for the long term.
✅ Dr. Reddy's Laboratories plans to re-launch the therapeutic equivalent generic version of its Suboxone sublingual film in USA. A big positive for the company.
❎ Anil Ambani is in deep trouble as the Supreme Court threatened him with imprisonment in case of payment defaults. Sell Reliance Communications, Reliance Capital, Reliance Naval & Engineering and Reliance Infrastructure.
✅ HCL Technologies has received a 5-year contract from EDF Luminus, the second largest electricity producer and energy supplier in Belgium. A big positive for the company.
✅ Goa Carbon has been rising steadily with higher volumes. Some good news may be in the offing. Accumulate.
✅ GIC Housing Finance and Mitsubishi are in talks with GMR Infrastructure for a minority stake in its airport holding company. This move will help prune debts of Rs.20000 crore. Buy.
✅ Indiabulls Housing Finance has restarted its bull run and it may recover its lost glory in the next few quarters. Buy.
✅ Varun Beverages plans to penetrate into newer markets by acquiring franchise rights for Pepsi Co. products. Buy for the long term.
✅ Andhra Bank intends to sell 30% stake in India First Life Co, which will help improve its financials. Buy.
✅ Regarding disclosures, Yes Bank has clarified that it did not violate the norms set by the RBI. The bank continues to perform well. Accumulate.
✅ The Emami counter has become volatile after the promoters sold 10% stake. The proceeds of Rs.1600 crore will help them pare debt. Buy selectively.
✅ Biocon corrected by about 10% recently as investors unwound their positions. The stock, however, looks strong fundamentally and technically.
✅ A huge order of around Rs.1741 crore has put Titagarh Wagons in a sweet spot. A safe buy at the current level.
✅ J.K. Cement has lined up Rs.1700 crore for expansion and foray into new markets. The cement boom is also likely to start soon. Start buying selectively.
✅ Raymond plans to enter the affordable housing sector. This move will help monetise its surplus land. Buy.
✅ Mastek, which posted a good set of numbers for 9MFY19, is likely to notch a consolidated EPS of Rs.42 for FY19. The stock may cross Rs.420 soon.
✅ Vindhya Telelinks is likely to notch a consolidated EPS of Rs.220 for FY19. A conservative P/E of 10x will take its share price to Rs.2200 in the medium term.
✅ Deepak Fertilizers & Petrochemicals is available at 67% discount to its 52-week low of Rs.397 recorded in April 2018. Buy for decent returns.
✅ Saksoft, one of the fastest growing IT companies, is set to notch an EPS of Rs.45 for FY19. Buy for 40% returns.
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