Impact of Reforms - India

08 November 2012 Asia Pacific/India Equity Research Investment Strategy India food market Strategy Research Analysts Neelkanth Mishra 9122 6777 3716 neelkanth.mishra@credit-suisse.com Ravi Shankar 91 22 6777 3869 ravi.shankar@credit-suisse.com STRATEGY Reforms: The chivalric and the Future Figure 1: Reforms bear fruits with a tuck away of 6-8 years Source: Credit Suisse As the government go on the gas on economic reforms, the stock mart has responded positively, instinctively comparing it to reforms of the past. We analyse history to get a sense of scale; and drill belt down on from each one proposed step. ? Analysing past reforms: W e went through major reforms since 1991 and the unwrap down 22 budget speeches to assess changes and their economic impact. We re-discovered how dramatically the saving has changed: de-licensing and de-reservation; import duties cut from 78% to 7%; NPAs down from 26% to 2.5%; import licenses and dual exc hange rates to exonerated legitimate account. ? Proposed reforms besides difficult or not historic: tout ensemble precisely three of 112 pending bills collect either low-toned probability or low impact, and the temporal decline in parliamentary and legislative activity compounds the issue.

administrative changes are more probably by definition, but are not easy, and their impact seems too far down the line. ? Turning, but dismisst carry up for lost cadence: The change is encouraging and the worryingly anti-business political rhetoric seems severely behind us. Further, in our view, ref orms in India are largely autarkic of who r! ules: the election schedule matters not. However, it can take 6-8 years from reform intent to impact, and the investment cycle is marvelous to recover for the conterminous 3-4 years. We maintain UW on the investment-driven sectors: sell L&T, BHEL, Tata, bed shroud and banks with investment focused balance sheets. DISCLOSURE APPENDIX CONTAINS analyst CERTIFICATIONS AND THE STATUS OF NON-US ANALYSTS. FOR OTHER IMPORTANT DISCLOSURES, visit...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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