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MOSL: Morning India (24/January/18): 1. Budget Preview 2018-19 2. Strategy (3QFY18 interim earnings review) 3. Indiabulls Housing 4. United Spirits 5. RBL Bank 6. GRUH Finance 7. PNB Housing

MOrning India (24/January/18): 1. Budget Preview 2018-19; 2. Strategy (3QFY18 interim earnings review); 3. Indiabulls Housing; 4. United Spirits; 5. RBL Bank; 6. GRUH Finance; 7. PNB Housing; 8. Dewan Housing. Fin.; 9. Crompton Gr. Con; 10. Mahindra CIE

Today’s top research theme
Budget Preview 2018-19: Union Budget Expectations—What’s in whose kitty?

• The government is set to present the Union Budget on 1st February 2018. Expectations and excitement run high as it will be the first post-GST and last full-year budget before the General Elections in 2019. In this note we discuss four key themes.
• First, we believe that the fiscal deficit target of 3% will be postponed. We expect the target to be revised to 3.4% for FY18 (FY18BE: 3.2%) and to 3.2% for FY19 (v/s 3% target set last year).
  Second, capital spending will be budgeted to grow ~10% in FY19, following ~7% in FY18.
• Third, while rural spending may be revised upward for FY18, limited financial resources will make it difficult to announce a targeted scheme for the poor.
• Fourth, the government is expected to reduce the corporate tax rate by lowering tax for companies with turnover of up to INR25b. This could cost ~INR100b. Apart from this, we do not expect any further direct/indirect tax relief.

Piping hot news
ONGC ties up Rs 18,000 crore loan from 3 banks for buying HPCL
State-owned Oil and Natural Gas Corp today said it has tied-up over Rs 18,000 crore loan from three banks to part finance its Rs 36,915 crore acquisition of Hindustan Petroleum Corp Ltd. In a regulatory filing, ONGC said it had yesterday entered into loan agreements with Punjab National Bank, Bank of India and Axis Bank Ltd for the borrowing Rs 18,060 crore for the acquisition.