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Best Infrastructure Stocks To Buy In India 2023

04 Dec 2023

In India, and the economy for that matter, infrastructure is at the core of development and growth. As a developing country has key aims to evolve into a developed one, India sees the requirement of infrastructure spearheading this process. This is one of the reasons why the best infrastructure stocks in India could be investment choices to take seriously. 

Why Infrastructure Matters

Infrastructure forms India’s backbone and includes water, road, rail, and air connections. Additionally, on a larger scale, infrastructure deals with commercial and residential spaces and the planning of whole cities and the way they are efficiently managed and run. This whole sector accounts for job creation and the increase in incomes of the citizens of the country. Domestically, and internationally, it may mean a rise in business activity in the form of imports and exports. 

A well-developed infrastructure sees that a country maintains its connectivity to the world at large. In this sense, there is not a country on the planet that can ignore the focus and growth of infrastructure. The recent budget announcements concerning infrastructure have given a boost to the sector, with companies like Larsen and Toubro, ABB and Siemens, all involved with infrastructure and capital goods, benefitting from a rise in the capex regulated by the government. In terms of the best infrastructure stocks in India, infrastructure companies generating these will potentially see an increase in investment in the present economic scenario. 

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The Best Infrastructure Stocks

The focus of the Indian government has been the infrastructure in this year’s budget (2023) with concrete aims to support the demand for real estate, build roads and highways, and enhance airport areas and spaces. Its plans are ambitious as laid out in the NIP (national infrastructure pipeline) and any stocks to do with infrastructure from cement companies to port authorities and cargo businesses may potentially see growth. Having said this, these are some of the infrastructure stocks to buy in 2023 based on your own financial goals: 

1. Adani Ports

APSEZ or Adani Ports and Special Economic Zone is the largest commercial port in India. It accounts for almost a fourth of the movement of cargo in India. Its presence in 13 domestic Indian ports is strong and it offers connectivity in India’s hinterland. Port facilities boast of the latest infrastructure with the ability to handle large vessels entering Indian shores. The company has witnessed growth and with expansion potential, this could be a company worth considering for investment. 

2. GMR Infrastructure Limited 

GMR Infrastructure Limited is majorly involved in the operations and development of airports, coal and exploration activities, the generation of power, the development of highways, and key engineering, construction and procurement contracting activities. 

This is a conglomerate with inroads into energy, highways and airports. It stands out as the world’s second-largest private airport operator. The company has also got several toll projects in the pipeline and is on the expansion and growth path. One of the best infrastructure stocks in India, GMR Infrastructure may be a company investors can consider investing in according to their goals. 

3. Larsen and Toubro Limited

Larsen and Toubro Limited, a conglomerate involved in providing superior engineering, procurement, and construction (EPC) solutions in the sectors of infrastructure, power, hydrocarbon, financial services and information technology is a stalwart in India. One of the leaders among infrastructure companies, L&T had posted a 21% increase in profit for FY 21. 

The company is invested in sustainability and human capital practices and is nearly engaged in most infrastructure and real estate projects at the national and individual levels. With a wide reach and scope of services offered, L&T is a huge business in India and has been a leader in the infrastructure industry for several years. 

4. Dilip Buildcon Limited

Dilip Buildcon Limited is a large infrastructure business in India. Originally starting operations in the residential real estate space, the company branched out into building petrol pumps and delved into government projects. The company later started building roads as well. The presence of Dilip Buildcon is robust in Madhya Pradesh and the government of this state is a long-standing client of the infrastructure company. 

Among the best infrastructure stocks, Dilip Buildcon employs a huge amount of staff and has a reputation for scheduled project completion (90%). The company is the biggest EPC employer and fleet owner in the country. Its customers are the Indian government, namely the National Highways Authority of India, the Madhya Pradesh Road Development Corporation Ltd., and the Ministry of Road Transport and Highways. 

5. Rites Limited

Owned by the Indian government and incorporated in 1974, Rites Limited plays the role of a multidisciplinary consultancy firm. It offers services in the areas of transport, infrastructure, and other related technologies. Functioning under the Ministry of Railways, Rites Limited is uniquely positioned for its diversification of services. Its geographical reach is also broad in a range of sectors like highways, railways, metros and urban engineering and sustainability, ports, airports, ropeways, inland waterways, institutional buildings and structures and renewable energy. This is the sole export arm of the Indian Railways that provides rolling stock, apart from Malaysia, Thailand, and Indonesia.

6. Build a Strong Portfolio 

Interested in any infrastructure stocks? Then you should go ahead and open a demat account and start your investment foray into this sector. Infrastructure is an ever-growing sector as the demand for infrastructure products and services is on the rise with development in all areas in India. You get a wide choice of companies to invest in, and can also explore consulting companies in the field. 

It is important to note that other companies may be indirectly related to the infrastructure sector like Ambuja Cement, ACC, Tata Steel, and the like. You may have a look at some of these while doing your research in locating some infrastructure stocks to invest in. Don’t forget to explore an upcoming IPO while you are doing your background work. Above all, investors should consider investing in a particular stock/sector based on their individual requirements and financial plans. 

 

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