Morgan Stanley Research
* Overall, we think the Budget took a few more steps in the right direction. However, we read the indicative message from the Budget measures that although the government is likely to initiate reforms, the pace of implementation is unlikely to be strong enough to sustain the current 9% growth without concurrent emergence of overheating signs.
* Not surprisingly, the Budget avoided the push for privatisation and foreign direct investment (particularly multi-product retail business and insurance sector). More important, in our view, is that while the government will likely initiate some reforms, the pace of implementation is unlikely to be strong enough to sustain the current 9% GDP growth without concurrent emergence of overheating signs.
* We believe that the government needs to anchor a stronger supply response (growth in productive capacity) in order to transition to higher and sustainable growth. The government needs to implement measures to accelerate the supply-side response by investing much larger sums in infrastructure, augmenting resources through privatisation, implementing labour reforms, and strengthening the regulatory and administrative framework.

Motilal Oswal Securities
* Several sectoral budget announcements impact either earnings estimates in some cases or just sentiment in most other cases. At the end of it all, Sensex EPS estimate for FY08 stands downgraded by 0.6% to Rs830 (from Rs835 earlier), still a year-on-year growth of 17.7%.

Sector and Stocks
* The Budget has a positive impact on engineering and power, FMCG and the telecom sector. The Budget has a negative impact on cement, infrastructure, IT and retail.
* Overweight on automobiles, banking and finance, cement, engineering and power, FMCG and infrastructure, IT, pharma and telecom. At the same time neutral on media, metals, retail and textiles.
* Considering the limited impact on fundamentals and positive long-term outlook, we recommend taking advantage of the sharp correction to buy stocks. Top bets are Bharti Airtel, Reliance Communication, Maruti Udyog, ICICI Bank, Punjab National Bank, Infosys Technologies, Dr Reddy's, SAIL, and Grasim. We also upgrade our ratings of HDFC Bank, Satyam Computers, HCL Technologies and Larsen & Toubro from 'neutral' to 'buy' after the recent correction.

Religare Securities
* A politically correct budget, the fourth by the UPA government, attempting to rein in inflation, while seeking continuation of the growth momentum. Overall, we rate the budget as macro-positive with focus on curbing inflation and ensure long-term sustainable growth. There can be short-term volatility in sectors like cement, infrastructure and IT. However, long-term fundamentals of the sectors still remain strong.

Sector and stocks
* Budget is positive for automobile, construction, FMCG, paper, pharmaceuticals, shipping (dredging) and textiles sectors.
* Preferred stocks: Ashok Leyland, M&M, Nagarjuna Construction, IVRCL, ITC, GAIL, RIL, Ranbaxy.
* The increase in excise duty is likely to affect all the cement companies. A majority of the cement companies have prices above Rs 190. However, cement companies will be able to increase price and extra excise duty will be passed on to consumers. Top sell: ACC, GACL, Ultratech Cement.
* Sugar is a sector left out of the Budget. There is no upside in the sector in the medium-term, hence our outlook remains negative on the sector.
Top sell: Bajaj Hindustan, Dhampur Sugar.

Enam Securities
* Fiscal consolidation strategy which is revenue-led is highly leveraged to economic growth.
* Finance minister's base assumption of FY08 nominal GDP growth at just 13%: corporate and service tax could improve if GDP growth is actually higher.
* Sensex EPS is marginally changed due to Budget for FY 2006-2007 from Rs 728 to Rs 738. For FY 2007-2008 the same has changed from Rs 852 to Rs 850.
* Tax incentive removal in housing finance, infrastructure finance and realty have given negative surprises.

Sector and stocks
* Removal of customs duty on coking coal is positive for JSW steel. Removal from excise duty on biscuits with a price below Rs 50 per KG is good for Britannia as 30% revenue comes from this segment.
* IT services: Not as bad as initially interpreted. MAT rate of 11.33% applicable to Sec 10A/10B income is introduced from FY08. However, the impact is almost neutral.
* ESOP brought under ambit of FBT. Implication negative. Neutral to TCS as no ESOPs. Overall marginally negative for sector.

MAN Financial-Sify Securities
* The Budget tried to maintain growth momentum by enhancing investment in agriculture and infrastructure. Health and education spend is increased further to ensure sustainability of the benefits of demographic divide. Direction on tax reforms is maintained. Stable tax policy to boost growth momentum.

Sector and stocks
* Positives on auto, consumer, engineering, oil & gas, telecom, while the negative impact is seen on cement, construction, IT and petrochemicals. The budget is neutral on financials and metals.
* Excise duty cut on petrol and diesel to reduce under recovery along with extension of 80IA benefits to gas pipeline industries augur well for HPCL, BPCL, IOC. Cairn is expected to be a loser.
* Customs duty cut on polyester and fibres and intermediate makes RIL and IPCL a loser.

Kotak Securities
* The Budget has done the right thing by focusing on sustainable long-term growth of the economy.
* While structural measures to control inflation may have an impact in the longer term, we expect the government to take fiscal and monetary steps to control inflation during the year.

Sector and stocks
* The industries benefiting will be capital goods and engineering, food processing and FMCG, hotels, logistics, oil & gas, pharmaceutical and textiles. Sectors with negative impact includes cement, construction, and information technology.
* Preferred stocks: Siemens, Crompton Greaves, Riddhi Siddhi Gluco Biols, Allcargo, Concor, IGL and Great Offshore.

Networth Stock Broking
* Budget 2007-08 has been favourable for the textiles, FMCG and power sectors and unfavourable for the construction, cement and IT sectors.
* APDRP extension to towns having more than 50,000 population is expected to benefit SEBs and distribution companies. Positive impact on Torrent Power.
* Transmission and distribution equipment manufacturers are likely to benefit from high spending under RGVY. Positive impact on Genus Overseas and EMCO.
* Coal block allocation to government companies to diversify the revenue streams of the PSU companies. Positive impact on NTPC, Neyveli Lignite, GMDC.
* Due to imposition of service tax on rental of immovable property, for retailers and malls the lease rentals might go up, thus further pressurising the EBIDTA margins of key players undertaking major expansions. Negative impact on Pantaloon Retail, Reliance Retail, Titan, Shopper's Stop and Trent.

Sharekhan
* Positive on capital goods and construction sector. BHEL, L&T, Siemens, Crompton Greaves, KEI Industries, Genus Overseas, Bharat Bijlee and Indo Tech Transformers emerge as good bets. On the FMCG sector front, Britannia, ITC, Nestle and Kohinoor, Agro Tech, Ruchi Soya stocks good performers.
* A negative view on the IT sector, Satyam Computer and HCL Tech as the most impacted stocks except TCS (as it has not given any stock options). Positive on the pharmaceuticals sector, Ranbaxy, Dr Reddy's and Cadila strong players. Ansal Properties and Parsvnath as good stocks for the real estate sector. A positive view for the tourism and tyre sector. Indian Hotels, Hotel Leela, Taj GVK and Royal Orchid emerge as promising stocks in the tourism sector.

BRICS Securities
* The Budget cannot be termed as positive for the India Inc. In our view, the ongoing correction in the markets has been primarily due to factors unrelated to the Budget.
* Nervousness on the interest rates, volatility in the global stock markets and rather expensive valuations have fuelled the recent correction. And with no positive indicators from the Budget, the market has seen the correction getting sharper.
* With the current 11.7% fall in the Sensex, we believe that the market valuations have largely corrected for the over-valuation that existed.
* However, we maintain our longstanding view that the annual Budget's influence continues to wane each year – it is the fiscal perspective that is more important. So we expect the market to continue on its natural path save some affected sectors.

Sector and stocks:
Our top picks are therefore, not driven by the Budget but by the price correction that has taken place in the last few days. We would overweight technology (Satyam, TCS and Infosys), energy (Reliance and ONGC) and automobiles (Maruti, Mahindra and Hero Honda).
* We would underweight matetials (primarily due to cement) and banks (given the continuing pressure on interest rates).
* We would be neutral on telecoms (positive weight being Bharti), infrastructure (positive on L&T) pharmaceuticals and media.

Emkay share & stock brokers
* Going ahead, the renewed initiatives announced for agriculture in this budget specifically with regard to increased plan outlays, creation of irrigational facilities, creation of water management cells, improved production due to better utilisation of seeds and fertilisers should ensure a sustainable growth in agriculture. We believe that the food-processing industry would be major beneficiaries of the sustained agriculture credit.

Sector and stocks
* The power sector will benefit from the expected new ultra mega projects, besides the Golden Quadrilateral project is also fast moving towards completion. On the other hand, the water and irrigation projects will not only benefit construction companies but also the domestic capital goods players as well as pumps and generator-set manufacturers.
* The long-term investment time frame and reasonably good risk to reward expectations are primary reasons, which we believe are attracting FII investment in the Indian equity market and we do not see any change in this trend, at least in the medium- to long-term.
* Stocks from FMCG, food processing, telecom, hotels, capital goods, power, oil & gas/allied services players to be impacted positively.
* Infrastructure, consumption and agri related sectors will be the major beneficiaries of the process.

First Global
* GDP growth may well slow down in the coming year -- we have two takes on this. The first is conventional: (i) the interest cycle is set to accelerate further on the upside. This will crimp growth, no doubt. But (ii) is perhaps even more relevant: in the new service tax regime, there is now virtually no service one can render in India (within boundaries, of course!) that is exempt from service tax.
* Overall, the finance minister may achieve his growth objectives in agriculture, and attract investments into infrastructure development with his Budget proposals; some of his direct and indirect tax initiatives may have seriously dampened business sentiment. The move to impose MAT on IT service companies and the increase in dividend distribution tax from 12.5% to 15% are expected to adversely impact several companies. Corporate India is certainly not pleased, nor are the markets.

Sector and stocks
* Auto components is a sector that is brimming with huge potential in the 'global outsourcing in manufacturing' story. Given its cost advantage, engineering skills, delivery capabilities and strong client base, India is well poised to play a significant role in global auto component outsourcing. Preferred stocks: Amtek Auto, Bharat Forge, MICO, Sundram Fasteners, Sona Koyo, Lumax.
* The Budget has by and large met the expectations of the FMCG sector with its pro-agriculture stance and its incentives for the food processing business. Preferred stocks: Marico, Dabur and HLL.

ASK-Raymond James
* Unless inflation "seasonally" falls off by end-March or so, expect more drastic steps on the monetary front - further interest rate hikes and liquidity contraction.
* Forthcoming assembly elections in vital states like UP can accelerate the time-frame for such action to tame inflation at any cost.
* We do not expect any significant reforms or policy initiatives over the next two years with election fever rising over time and the lack of political consensus or will, within the UPA and Congress itself.
* So, as we move into the new fiscal year, the economy is largely on auto pilot with two major risks to growth and liquidity:
* In sum, the risks facing equity markets today are higher than before in the last 3-4 years of a highly benign macro and global environment and the Indian market is unlikely to recover in any hurry.

Sector and stocks
* A positive scenario will emerge in the automobiles and oil & gas sector and the hospitality sector.
* Recommended stocks are Tata Motors, M&M, Bajaj Auto and RIL, IPCL, GAIL, and IOC for automobiles and oil & gas sector respectively as the best bets.
* As regards banking sector, it holds a neutral view and recommends HDFC, ICICI and SBI as strong beneficiaries. For cement and the FMCG sector and the IT sector and the construction, the report holds a negative view.
* For media/entertainment, pharmaceuticals, real estate and metals, it has a neutral view.

Deutsche Bank
* The 2007 Budget was neither overly negative nor positive in our view.
Instead, the recent market correction was driven more by the global equity sell-off – and investors ought to look beyond the Budget noise to assess whether India's underlying fundamental outlook has changed. We believe it hasn't, and this is an opportunity for long-term investors to start buying – especially those who missed the boat on the way up.
* The short-term outlook depends on global carry-trade unwind prospects. Typically, the risk lies in carry currencies with high yields where currencies are significantly above fair value, as well as those with large current account deficits. Our emerging market strategists believe the risk is greater with Turkey, Brazil, South Africa, Mexico, Hungary, Indonesia and the Philippines. India looks much better.
* Our economist believes lower tariffs, a tighter fiscal policy and higher borrowing costs will slow GDP growth over the next few quarters. However, the significant fiscal correction in recent years has tempered a major structural macroeconomic risk with India. In addition, the latest Economic Survey shows the savings rate has jumped to 32.4% of GDP in FY06 and is likely to cross 40% by 2020 – which can fund rapid growth in the financial system, infrastructure and manufacturing.
* On current estimates, the Sensex is now at around 15x March 2008 P/E. The market may still undershoot on the downside, but the froth appears to be largely out now.

Sector and stocks:
* Positive on the banking sector. State Bank of India, Punjab National Bank and Bank of Baroda emerge as lucrative scrips. Uncertainty looms over HDFC stock.
* Negative on IT sector with HCL Tech and Satyam Computers as uncertain scrips.
* Uncertainty over the retail sector with Pantaloon emerging as a laggard.
* Negative on the property sector with Ishaan emerging as an easily ignorable proposition.
* Neutral on the metals sector with Sesa Goa stock as unattractive scrip.

Anand Rathi Securities
* The budget for 2007-08 is overall neutral from the equity market perspective. Overall, it warrants a tag of being a 'non-event'.
* Last year we had argued that an event like Budget should be a non-event from an investment decision perspective.

Sector and stocks
* Five-year tax holiday for hotels in NCR region between April 2007 and March 2010, will benefit Royal Orchid Hotels Ltd, which is planning to build a 4-star property in this region in the near future.
* We expect the decrease in customs duty to have a positive impact on steel producers.
* Sectors benefiting from the Budget include agro-products, steel, hospitality, FMCG, pharmaceutical, pipes and textiles. The industries getting negative impact includes construction and real estate, information technology and logistics and offshore.
* Monsanto, Jain Irrigation, Tata steel, Britannia, Royal Orchid Hotel Ltd, Cipla, PSL, Sangam India are preferred stocks.