7 Shares That Will Benefit From The 7th Pay Commission Implementation

Investment

oi-Sunil

By Sunil Fernandes

Published: Tuesday, November 24, 2015, 8:59 [IST]

The 7th Pay Commission, if implemented as per recommendations, will cost the government a huge Rs 1.02 lakh crores, including a sum of Rs 24,000 crores, which will be from the Railways.

This will give a boost to money in the hands of 47 lakh employees and about 52 lakh pensioners. The disposal income when goes up, will lead to greater increased spending and there are select companies that could benefit. Here are a few companies shares that could benefit from the implementation of the 7th Pay Commission.

Maruti Suzuki and Tata Motors

Since the company has entry level models, individuals government employees with a higher disposal income, might opt for a car. This could benefit Maruti, whose shares have been soaring on the back of lower inputs costs and higher sales volume. Shares in Maruti have already hit a lifetime high and one cannot say with certainty, if there is more steam left.
Similarly, Tata Motors with the Nano could be one of the beneficiaries.

Hero Motor Corp, Bajaj Auto and TVS Motors

All these three companies, who are into 2-wheelers are likely to see better volumes, due to the implementation of the 7th Pay commission.

Voltas

Companies like Voltas could benefit, as the company's air conditioner demand could be robust as discretionary spending could go up.

Bata India

Religare in a research report said "We estimated a hike of 28 per cent in CPC. The implementation of the CPC and state pay commissions would boost India's consumption demand and GDP growth, benefitting consumer discretionary companies such as Bajaj Auto, Maruti Suzuki, Hero MotoCorp, Bata India, Jubilant FoodWorks,

Kajaria Ceramics and Voltas

The 7th Pay Commission will be implemented from Jan 1, 2016, when government employees will get higher amounts by way of salary and pensioners who get higher pensions.

It's almost certain that spending would rise and many companies would benefit due to the 7th Pay Commission.

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