New Delhi, June 7: The union budget is expected to benefit steel, aluminium, inorganic chemicals, fertilisers, oil and gas, power and petrochemicals, the Credit Rating and Information Services of India Ltd (Crisil) has said.``The eight per cent across the board hike in customs duty, specific duty hikes and duty cuts on inputs will offer noticeable support to a number of industries led by steel,'' Crisil said in a post-budget analysis.The Crisil Research and Information Services (Crisil) report said the higher allocation to housing, roads and power would help clear steel industry's huge inventories that had piled up due to lack of demand in the last few years.Petrochemical sector growing at the rate of 15 per cent is likely to benefit in terms of increased product realisations (linked to landed cost) on account of the additional import duty.Reduction in import duty of paraxylene would have a positive effect on fibre intermediate manufacturers like Reliance and Bombay Dyeing.The additional importduty on imports of all inputs of the aluminium sector is expected to marginally raise the material costs of domestic aluminium producers. However, upward revisions in the prices of final products remain contingent on the recovery of key end user sectors such as electricals and transport.While Hindalco and Nalco are likely to benefit from the increase in landed cost of aluminium ingots and an upturn in metal prices, Indal is likely to be hit by these factors owing to its continued dependence on metal imports, Crisil said. The nutrient imbalance in fertiliser industry will be reduced through increased consumption of phosphatic, potassic and complex fertilisers due to various changes in subsidies and prices. Urea manufacturing companies will not be adversely affected by the price hike due to the present excess demand.Effective protection to Indian Refineries has been enhanced by increasing import duty on petroleum products by eight per cent and simultaneously reducing the duty on imported crude oil by fiveper cent.The extended period of tax exemption will improve the profitability of refineries being set up currently by Numaligarh Refineries, Reliance Petroleum, Essar Oil and Bharat Oman Refineries Ltd. The decision to delicense oil sector, speedy clearance of foreign direct investment (FDI) proposals in the sector, disinvestment in Indian Oil and Gas Authority will result in greater investment in the sector, according to Crisil.The reduction in import duty on membrane cells to 10 per cent will reduce capital costs and facilitate conversion of mercury cell plants to membrane cell plants which are more cost efficient thus benefiting companies like Gujarat Alkalies, Punjab Alkalies, Sree Rayalseema Alkalies and Gujarat Heavy Chemicals, says Crisil. In the steel sector, merchant cold rollers like Jisco, Ispat Industries, Tata SSL and Uttam Steel which are affected by cheaper imports due to reduction in the duty differential between hot rolled and cold rolled steel products will benefit from the five percent hike in duty on cold rolled products, according to Crisil.Domestic ferro alloy producers like Ispat Alloys, Jindal Ferro Alloys will benefit from the protection offered by the special additional import duty on their finished products.Crisil, however, said steel manufacturers are unlikely to benefit from the decline in freight rates on steel products for distances beyond 600 km due to the increase in freight rates for coal and iron ore for distances within 500 km.
