Markets bet on infrastructure announcements – who will benefit?

According to Axis Securities, firms operating in the highway, railway, and urban infrastructure sectors are well-positioned to benefit from increased attention being paid to these areas.

The Street is banking on some significant capital expenditure announcements in the upcoming Budget, which is why equities in the construction and infrastructure sectors are still highly traded. Experts anticipate that the government would keep to the Rs 11.1 lakh crore capital expenditure projection stated in the Interim Budget, at the very least. “An unwavering focus on roads, power, urban development, and railways will create key long-term economic multipliers,” Axis Securities stated.

Thus, to meet the goals of the National Infrastructure Pipeline (NIC) and Gati Shakti initiatives, the brokerage expects a significant step up in capital expenditure on infrastructure in the Union Budget 2024-2025.

It is expected that substantial attention would be paid to important infrastructure elements such as highways, trains, airports, and urban infrastructure. It is anticipated that the government would increase expenditure on roads, bridges, highways, and urban development, with extra money going towards initiatives like Bharatmala and Sagarmala.

Huge initiatives like Jal Jeevan Mission, High Speed Rail, Smart City, Inland Water Ways etc likely require special funding, which will fit into the overall processes of National Infrastructure Pipeline (NIP).

As part of the company’s approach to support the growth of the construction industry, Tata Projects has urged the government to promote private capital formation and, therefore, act holistically. Vinayak Pai, the managing director and chief executive of Tata Project said, “Concerning fiscal stimulus measures the government should encourage more capital expenditure in the private sector as the area will be instrumental in growth.”

Finance Minister Nirmala Sitharaman increased the infrastructure spending by 11.1 percent in the Interim Budget. According to Axis Securities, firms operating in the highway, railway, and urban infrastructure sectors are well-positioned to benefit from increased attention being paid to these areas.

The government’s goal is to improve the nation’s infrastructure through the National Infrastructure Plan (NIP). According to the Axis research, large highway projects are anticipated to increase demand for cement, which would help businesses like UltraTech Cement, Ambuja Cements, Dalmia Bharat, JK Cement, JK Lakshmi, and Birla Corp. Additionally, the budget could place a strong focus on digital infrastructure, including providing incentives for smart cities and data centres that would help businesses like Anant Raj. According to the analysis, urban developers like MICL and TARC may benefit from a renewed emphasis on affordable housing initiatives in rural areas.

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