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Sector Focus : Shipping

Shipping: State of the industry (2000-01)

• In 2000-01, the financial performance of Indian shipping companies improved, due to a significant increase in freight rates and a marginal increase in seaborne trade.
• During the April-November 2000 period, India's seaborne trade increased by 3.3 per cent, due to an increase in exports. However, imports (largely of petroleum products) declined.
• During the April-January 2000-01 period, freight rates for dry bulk commodities remained firm, due to higher fuel costs and increased demand from the South-East Asian countries. However, freight rates did not increase between April 2000 and January 2001, as the increase in demand was balanced by an increase in fleet supply.
• During the April-January 2000-01 period, freight rates for crude oil and product tankers increased significantly, due to a significant increase in the seaborne trade of crude oil and oil products.

Shipping: Budget impact

Impact factors

Company name	Impact	Impact factors
Essar Shipping	Pos	A, B
(9.35, 9.80)
Shipping Corporation of India	Pos	A, B
(43.55, 43.25)
The Great Eastern Shipping	Pos	A, B
(34.10, 33.95)
Varun Shipping	Pos	A, B
(12.80, 13.80)

Note:
Figures in brackets indicate the closing share prices, on February 27, 2001 and February 28, 2001, respectively.
pos= positive neg= negative neut= neutral

Source: CRIS INFAC

A: The reduction of surcharge on corporate tax, from 13 per cent to 2 per cent and the expected decline in interest rates, is expected to have a positive impact on the players.

B: The marginal increase in the rate of depreciation, from 20 per cent to 25 per cent is not expected to have a significant impact on the players.

Rediff-CRISIL Budget Impact Analysis
Budget 2001

Disclaimer: CRISIL has taken due care and caution in compiling this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of its web site.

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