×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Budget impact on sectors| Retail

Budget impact on sectors| Retail
Comment E-mail Print Share
First Published: Mon, Feb 28 2011. 10 06 PM IST
Updated: Mon, Feb 28 2011. 10 06 PM IST
Retail
Retail stocks had rallied initially during the finance minister’s budget speech in Parliament. The finance minister set the stage for foreign direct investment in multi-brand retail by talking about inflation, shortcomings in distribution and marketing, cold storage chains, etc.
Also See |Share of organized retail in total retail sales is very low in India compared with other countries. (PDF)
But it didn’t materialize and stocks of retail companies tanked. Shares of Pantaloon Retail (India) Ltd fell by 12% from its intraday highs.
The proposal to convert the optional excise duty on branded and ready-made garments to a mandatory levy of 10% is also a negative for the sector, though the cost would be mostly passed through.
Other factors affecting the sector are: higher lease rentals would be a cause of concern for the sector, especially considering that net profit margins are already low; consumer sentiment and higher disposable income is key for the sector; higher employee costs and lack of trained manpower is another concern.
Comment E-mail Print Share
First Published: Mon, Feb 28 2011. 10 06 PM IST