Top infra stocks to bet on after Budget 2023 announcements
The companies like Larsen and Toubro (L&T), Siemens, ABB engaged in the Infrastructure and Capital Goods segment can be benefitted due to an increase in the capex by the government and private companies, as per brokerage and research firm HDFC Securities, which also believes that the increase in project awarding for Road and Highway development by NHAI and Morth can benefit companies like PNC Infra, KNR Infra, and NCC can be benefitted.
“Increase in capital expenditure and on Railway capex is a welcome measure that could trigger a lot of other investments by the private sector and stimulate income growth. Infra, capital goods and materials sectors could benefit out of this. Bond street is relieved due to borrowing estimates coming within expected levels,” the note stated.
During the budget speech on Wednesday, Finance Minister Nirmala Sitharaman announced that increase in Capital investment outlay which has been raised steeply for the third year in a row by 33% to ₹10 lakh crore, which would be 3.3% of GDP. The government will allocate ₹10,000 crore per year Urban Infrastructure Development Fund to be used for creating infrastructure in tier-2 and tier-3 cities.
Further, the capital outlay of ₹2.40 lakh crore has been provided for the Railways, could benefit companies like IRCON, RVNL, and wagon manufacturing companies operating into the development of railway infrastructure, as per HDFC Securities.
“The 25% YoY increase in allocation towards road outlay for the current fiscal year, give new hopes for growth in the road space in FY24. Companies with healthy balance sheets such as infra stocks PNC Infratech and KNR Constructions remain our top picks in the sector. Given the backdrop, we argue road developers must work on segmental diversification. We prefer road companies with robust balance sheets such as PNC Infratech (‘BUY’) and KNR Constructions (‘BUY’),” said another brokerage Edelweiss.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.