Infra stock: Budget bump: Top infra stock picks from top brokerages

The finance minister aims to drive growth by stepping up infrastructure spending. While capital expenditure has been increased by 26 per cent to Rs 5.5 lakh crore, cumulative budgetary support for roads and highways has been increased by 16 per cent and for metro projects by 193 per cent to Rs 1.17 lakh crore and Rs 19,000 crore, respectively. These measures bode well for infrastructure companies with funding having been a key constraint over the years. ET compiles the top infra stock picks of various brokerages

Container Corp of India

Budget BannerBy Edelweiss Wealth Management

Concor will benefit from the completion of the direct freight corridor as mentioned in the budget speech. The stock has closed above its previous swing high of Rs 450 after forming a base around Rs 420. A close above Rs 460 will provide further momentum.

Cummins

By ICICI Securities

Strong capital outlay on roads, rail and infrastructure will fuel demand for the company’s generator and industrial segments. Cummins will also benefit from the expected change in emission norms for diesel gensets in 2022 due to the consolidation of large players, technological leadership and topclass in-house testing facility.

JK Lakshmi Cement

By Sharekhan

The strong demand expected from government-led infrastructure projects, affordable housing and sustained rural demand is expected to drive healthy net earnings growth for the company over the next two years. Its balance sheet is strong with consolidated cash of Rs 1,020 crore.

Kalpataru Power

By Reliance Securities

The company is one of the key beneficiaries of strong transmission capex in both domestic and global markets. Strong visibility on the revenue front and sustained earnings momentum are likely to improve return ratios.

KEC International

By Reliance Securities

Strong order intake traction is expected to continue, led by higher transmission and dristribution spending by the state electricity boards, improved railway orders and recovery in overseas markets.

KNR Constructions

By Sharekhan

KNR is expected to be one of the key beneficiaries of the government’s planned investments in the road sector up to FY25. An already strong order book, normalising labour availability, increased industry tendering, rising toll collections and an improving balance sheet are some growth levers that can lead to an earnings upgrade for the company going ahead.

L&T

By ICICI Securities

The company will benefit from the budget’s focus on roads, railways, water, sanitation, metro and urban development. Additionally, the capital outlay toward externally funded multilateral products, both central and state, has witnessed generous increases. L&T has a presence in all infrastructure segments and a high market share of multilateral projects.

Ramco Cement

By Edelweiss Wealth Management

Ramco Cement is a beneficiary of the focus on infrastructure development in Tamil Nadu because of its dominance in southern India. The stock had a solid base around Rs 775 levels as it had bounced a couple of times after testing them. It has also overcome the previous swing high of Rs 865.

Siemens

By IIFL Securities

Localisation of medium-light voltage products, growing external exports and resilience in the services portfolio should aid operating profit margin expansion, with a pick-up in the capex cycle. Rise in order flows and investment in core sector should improve growth visibility and help sustain the rich valuations.