MY ANALYSIS ON THE PRESENT
DEMONETIZATION SCENARIO AS PER “ON GROUND” INPUTS.
If 50% of 14 lacs crore expected black money in the form of 500 to 1000 notes is converted.
It may take 8 -10 months for
withdrawals to happen approx 7 lac
crore cash may come into the system converted in new currency .
At that time people will not
keep cash and would like to invest into land , real estate , gold and other
avenues. Part of it will go to luxury
items and life style spending too.
So net net after a pain of
3-4 months the consumption may increase with higher pace.
Builder are taking good
advantage of this situation and those whose commercial project and land stock
was not sold from last so many months have
sold huge inventory in the last 4-5 days.
So for the select few its blessing in disguise.
As per the discussion with a renowned
CA in pune The long term black money generation will reduce atleast by 20-25 %
.
As various action from government and GST will
ensure that .
This one demonitisation step will have a big impact as
a manufacturer or trade who was doing 40% sales in cash will be forced to do
sales in cheque for the next 3-4 months when cash is not their in the system .. and his turnover will rise suddenly in
these few months ,the catch is once the cash comes in the system ,he cant again
drop his turnover to the old levels , as
Excise / sales tax and Income tax -all
departments will be tracking him and he will not be able to do much adjustment.
SO THEMES OF COMPANIES
WHERE CASH SALES WERE MAJOR PART WILL BE A GREAT PLAY IN THE COMING QUARTERS.
About MFI – once the cash
come back to system people will start repayment of EMI’s .
MFI cos also understand that
and may give 2-3 months break to people from EMIs.
But as their collection
system is very strong and people taking loan repay due to social pressures , chances of large scale
defaults are less.
So if the MFI sector corrects
much more due to lot of negativity ,there could be a case of buying them.
This is my personal analysis
as per the inputs from on ground people and CA’s , may be things will not play
out as per the assumption given above , people are requested to analyse on
their own .
