The infrastructure sector lays the foundation for economic development in a nation and brings growth in transportation, utilities, and energy sectors. Infrastructure companies construct, maintain, and operate critical public systems and services like roads, airports, rail networks, energy, telecommunications, water, payment systems, and waste management.
As India is keen on becoming a $5 trillion economy, the Indian government prioritises extensive construction projects such as highways, metro lines, renewable energy plants, logistics networks, and affordable housing.
Central and various state governments have undertaken initiatives to construct thousands of kilometres of roads under programs like the Bharatmala Pariyojana, as well as a comprehensive transport and logistics system under the Pradhan Mantri Gati Shakti Yojana.
In this blog, let's look at the top 5 companies looking to outperform in this sector:
|
S.No.
|
Name
|
Price by Earnings
|
Market Cap
|
Quarterly Net Profit
|
ROCE %
|
|
1
|
Larsen & Toubro Ltd
|
37
|
498064.4
|
4098.84
|
13.44
|
|
2
|
Rail Vikas Nigam Ltd
|
73.02
|
98371.25
|
217.8
|
18.7
|
|
3
|
IRB Infrastructure Developers Ltd
|
50.82
|
31312.22
|
99.87
|
8.96
|
|
4
|
NBCC Ltd
|
47.27
|
26241.3
|
107.19
|
31.99
|
|
5
|
KEC International
|
66.88
|
26218.04
|
87.58
|
16.05
|
L&T is known for its strong project execution, high-value acquisitions, and strategic divestments which makes it a key player in India’s infrastructure and technology sectors.
It specialises in engineering, procurement, and construction across diverse sectors like infrastructure, hydrocarbon, power, defence, information technology, and financial services.
They have been paying a healthy dividend of 34.6%.
Rail Vikas Nigam Ltd is a government company that specialises in rail infrastructure projects created by the Ministry of Railways. Its core activities involve laying new rail lines, doubling tracks, gauge conversion, railway electrification, constructing major bridges, and setting up workshops.
It has an order book of around Rs 65,000 crore, with major allocations for Railways, Vande Bharat trains, and metro projects.
The company has a strong financial track with a dividend payout of 33.4% and a median sales growth of 26.2% over the past decade.
IRB Infrastructure Developers Ltd is in the business of highway development, maintenance, and airport and real estate projects. IRB manages 36 projects and holds a 37% share of the toll operator market.
It also has a 20% share in the Golden Quadrilateral Highway Network. IRB manages operations in states like Maharashtra, Rajasthan, Gujarat, and Karnataka.
IRB’s experience, strategic expansions, and financial discipline make it a transformative player in India’s infrastructure landscape.
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NBCC is a Navratna company under the Ministry of Housing and Urban Affairs. It specialises in project management, Engineering Procurement & Construction (EPC), and Real Estate.
Under PMC, it focuses on civil construction like government redevelopment projects, hospitals, and educational institutions. EPC handles large-scale industrial projects like chimneys and cooling towers.
It has projects in Dubai, Maldives, Mauritius, and Seychelles and plans to expand in Burundi and Mongolia. Some of their noteworthy projects are Indo-Bangladesh border fencing, Indo-Pak border fencing in Gujarat, and the renovation of the Jallianwala Bagh memorial.
NBCC is a key player in government-led infrastructure and urban development and holds diverse project expertise across India and internationally.​​​​​​​
KEC International is a part of the RPG Group and is a leading global infrastructure EPC company. KEC operates across multiple sectors like Power Transmission and Distribution (T&D), Railways, Civil Infrastructure, Urban Development, Solar, Oil & Gas Pipelines, and Cables.
Recently, KEC secured contracts valued at Rs 816 crore. These orders include setting up industrial plants in India for steel, cement, and carbon derivatives, as well as tower supplies in the United States.
Expansion plans include a new manufacturing line for aluminium conductors at the Vadodara plant at Rs 60 crore, and an increase in capacity at the Dubai facility.
KEC is present in over 110 countries, with projects in India, the Middle East, Africa, South Asia, the Americas, and Central Asia.
Here are a few factors to look for before investing in the Infrastructure sector:
- Economic Growth: A nation’s economic progress is essential for the growth of infrastructure stocks. Without a strong economy, returns from these stocks will be limited. The Indian government has a strong lookout towards Infra projects and this will result in the segment's growth enormously.
- Government Initiatives: India’s government has introduced multiple initiatives to bolster infrastructure which will fuel growth and make the sector promising for investors in the country.
- Order Book and Execution: Infrastructure companies get large contracts from the government and private sectors. A company’s long-term prospects improve with a rich order book and timely project completion.
In Summary
Infrastructure stocks bring a unique opportunity for investors looking for long-term growth and stability. This sector adds diversification and connects them to India’s dynamic growth story which is something no investor should want to miss out on.
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