- by Stocktry Expert
- 04th Feb 2021
Top Nine Infrastructure Stock Picks From Top Brokerages
The government's record high capital outlay of Rs 1.08 lakh crore for the road ministry is likely to provide a boost to order inflows for the sector.The finance minister aims to drive growth by stepping up the infrastructure budget. While capital expenditure has been increased by 26 percent to Rs 5.5 lakh crore, cumulative budgetary support for roads and highways has been increased by 16 percent and for metro projects by 193 percent to Rs 1.17 lakh crore and Rs 19,000 crore, respectively.
Here’s a compiled list of the top infra stock picks of various brokerages:
1. Container Corp of India
By Edelweiss Wealth Management
As mentioned in the budget speech, Container Corp of India will benefit from the completion of the direct freight corridor. The stock has closed above its previous swing high of Rs 450 after forming a base around Rs 420.
2. Cummins
By ICICI Securities
Strong capital outlay on roads, rail and infrastructure will boost 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.
3. JK Lakshmi Cement
By Sharekhan
Over the next two years, affordable housing and sustained rural demand is expected to drive healthy net earnings growth for the company. Its balance sheet is strong with consolidated cash of Rs 1,020 crore.
4. 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.
5. KEC International
Strong order intake traction is expected to continue, led by higher transmission and distribution spending by the state electricity boards, improved railway orders and recovery in overseas markets.
6. KNR Constructions
By Sharekhan
In the government’s investments plan in the road sector up to FY25, KNR is expected to have the key beneficiaries. 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.
7. L&T
By ICICI Securities
With the budget’s focus on roads, railways, water, sanitation, metro and urban development the Company will benefit. L&T has a presence in all infrastructure segments and a high market share of multilateral projects.
8. 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.
9. Siemens
By IIFL Securities
With a pick-up in the capex cycle, localisation of medium-light voltage products, growing external exports and resilience in the services portfolio should aid operating profit margin expansion. Rise in order flows and investment in the core sector should improve growth visibility and help sustain the rich valuations.
