Best Infrastructure Stocks in India 2024

India is the 5th largest economy in the world, and the infrastructure plays a major role in the country's economy. The infrastructure sector is one of the fastest-growing sectors in the Indian economy right now and has always been on the priority list for the government of India. In this blog, we will analyze the best infrastructure stocks in India.

 

In the Union Budget of 2024, the government has allocated Rs. 2.66 lakh crore for rural development and rural infrastructure. 

The government is also planning for the development of the eastern region of India, covering Jharkhand, Bihar, Odisha, West Bengal, and Andhra Pradesh.

Additionally, the government will support the development of road connectivity projects in Patna and has announced three crore additional houses under the PM Awas Yojana in rural and urban areas.

 

The key components of an infrastructure sector are bridges, power, roads, highways, and the modern building and developmental projects. India is the third largest construction market in the world and drastic initiatives are being taken by the government of India to continually improve the infrastructure of the country which poses a huge opportunity for the companies under this sector to keep growing in the upcoming years. 

 

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Overview of the India infrastructure sector

The government of India has a vision to make India a developed nation by 2047 and big steps are being taken from them to bolster the infrastructure of the cities and improve its connectivity with rural areas to fuel growth of the economy and make the country more liveable. 

In a big step, the government decided to allocate 3.4% of the GDP towards the growth of the infrastructure sector which gives a huge impetus to the companies working in this sector. 

In terms of data, the Indian infrastructure sector is valued at USD 204.6 billion in the year 2024 and is forecasted to breach the USD 322.27 billion mark by 2029 which means a growth rate of CAGR of 9.57% during the period 2024 to 2029.

Amidst the development spree in this sector, the roads and highways are the prime focus of the government along with the railways and urban public transportation. They are ambitiously working towards expanding the highway network of India to 2 lakh kilometres by 2025. At the same time, they are also looking to increase the operational airports count to 220 and establish 23 waterways by 2030 among other developmental projects.

 

 

Best Infrastructure stocks in India 2024

Here is the list of the top performing Infrastructure stocks in India in which you can invest in 2024 to gain high profits: before investing in these stocks it is important to know important ratio in stock market.

 

1). Larsen & Toubro Limited

 

Larsen & Toubro is an international conglomerate that excels in providing engineering, and procurement and construction solutions in diverse sectors like infrastructure, hydrocarbon, defence and financial services. 

Apart from its diverse services in various fields, the company has strong financials with a resilient order book of INR 327,354 crore and a staggering ROE of 19.26%. Despite some common hiccups because of its increased working capital and fluctuating ROE, the company has strong fundamentals which makes it a lucrative investment option in this sector.

 

 

2). GMR Airport Infrastructure Limited 

GMR Infrastructure is a prominent name in the infrastructure industry which primarily deals in airport infrastructure business along with power generation, coal mining, highway development, maintenance and operation of special economic zones, and construction business including Engineering, Procurement and Construction (EPC) contracting activities. The company business is divided into Airport sector (55%), power sector (16%), transportation sector (8%), and other businesses (21%).

 

 

3) IRB Infrastructure Developers Limited

IRB Infrastructure Developers Limited is one of the leading infrastructure and construction companies in India which mainly deals in construction and maintenance of roads and highways along with airport development and real estate. The company boasts of being the largest road BOT operation in India with a total of 36 portfolios to its name. 

The company holds a significant position in India's road infrastructure, contributing approximately 20% to the Golden Quadrilateral Highway Network. Demonstrating its robust capabilities, the company can simultaneously handle the construction of a substantial 500 to 600 kilometers of road network.

 

 

4). Waaree Renewable Technologies Limited

Waaree Renewables Technologies Limited is another prominent name in the Indian infrastructure sector. Formed in 1999, the company is in the business of power generation through renewable sources and provides consultancy services in the domain. 

The company is the biggest Indian module manufacturer in the country and also boasts of being one of the largest vertically integrated new energy companies in the country. Its prime focus in the renewable energy business is on Solar PV and deals in Solar Pumps, Solar Park, Captive Consumption, Floating Solar, and Rooftop Solar. Company has an order book of 856+ MW and successfully executed orders of 96+ MW in Q1FY24.

 

 

5) HFCL Limited

Himachal Futuristic Communications Limited also known as HFCL Ltd. is a lucrative investment option for those looking to invest in the infrastructure sector. The company is a telecom infrastructure facilitator, involved in infrastructural development and has keen interest in manufacturing, and supplying advanced telecom equipment, optical fibre, and optic fibre cables. The company works in both government and private sectors with a diverse range of products and services serving telecom, railways, defence, and security & surveillance networks.

 

 

6) GR Infraproject

Formed in 1995, GR Infraprojects Limited has its expertise in the construction and operation of roads, railways, airports, metro and optical fire fibre projects. The company is responsible for the construction of prominent highways in the country such as NH-16, NH-85, NH-102, NH-82, NH-80, and NH-8E. 

The company primarily takes up projects on the basis of EPC AND BOT (Build Operate Transfer). It has also tried its hands into the Power Transmission business in order to diversify its business and it currently has a portfolio of 10 operational assets under its name which includes one NHAI annuity and one HAM project.

 

7) Hindustan Construction Company Limited

Hindustan construction company, formed in the year 1926 is the flagship company of Hindustan Construction Company Group. It primarily engages in engineering and construction of various infrastructural projects like tunnels, bridges, dams, hydro nuclear and other important developmental projects. 

The company has played a pivotal role in constructing some of the nation's most iconic projects, including a substantial portion of its hydropower and nuclear power capacities. 

With a vast portfolio encompassing over 4,000 lane kilometers of expressways and highways, hundreds of kilometers of complex tunnels, and numerous bridges, HCC has established itself as a key player in India's infrastructure development. Beyond core construction, the company also engages in infrastructure development and real estate through its subsidiaries.

 

Points to consider before investing in infrastructure stocks

• Quality and Quantitative examination: The correct way to pick the best infra stocks is by examining in detail the qualitative and quantitative aspects of a stock. It includes examining the tangible assets that the company in which you want to invest in owns, the company itself and the relationship between stock valuation and quality of the company.
• Overall assessment of the company: While investing in infra stocks it is always advisable to look at the financials of the company you are investing in thoroughly. From capital appreciation, net income, to physical assets and growth prospects of the company take everything into consideration before investing.
• Management Analysis: Being a prudent investor, it’s also advisable to do proper management analysis of the company you are investing in. It is important for an investor to be in sync with the capital structure, corporate governance, strategic direction and quality of operational efficiency of a company.
• Order execution efficiency: Timely execution of orders is an important metric to assess the efficiency of an infrastructure company. As the projects are increasing with the rapid growth in the sector and the deadline associated with the projects and the penalty for not adhering to the deadlines, it becomes crucial for companies to timely execute their projects and their performance can be evaluated on this metric.