Rate hike to push up costs: Realty, Capital goods firms.

 The latest repo rate hike by RBI is making the real estate and capital good companies worried, as it will hurt their recovery.

The home and vehicle loans will be now costlier. This will depress the consumer demand. The banks raised home loan interest rates by 30-40 bps when the repo rate was hiked last time. Now this will rise further as the repo rate is now cumulatively higher by 90 bps.

There will be an impact on capex plans as the project costs may go up. The capital cost of projects has increased between 25 to 50 percent for capital goods, due to commodity inflation.

The RBI's move from accommodative stance will ensure inflation within targets but it may affect several businesses.