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Major road and highway sector stocks in India

07 Dec 2023 Zinkpot 374
  1. India has been investing heavily in road and highway development in recent years. The national highway network has grown from 91,000 km in 2014 to about 140,000 km in April 2022, entailing a total investment of over Rs 400 billion.
  2. The Indian government has been actively investing in the development of road infrastructure, with major initiatives like the Bharatmala Pariyojana aiming to upgrade and expand the road network, including the construction of expressways. 
  3. The market for roads and highways in India is projected to exhibit a CAGR of 36.16% during 2016-2025, on account of growing government initiatives to improve transportation infrastructure in the country.
  4. India's investment in road and highway development directly benefits the road and highway stocks by creating growth opportunities for the sector. Moreover, recently, the Ministry of Road Transport and Highways in India has requested a budgetary allocation of ₹3.25 lakh crore for the fiscal year 2024-25 from the Ministry of Finance, which is a 25 percent increase compared to the previous year.
  5. The top road and highway companies to invest in India are:
    • Larsen &Toubro: With a market cap of Rs 4,66,192 crore, this company is engaged in engineering, procurement, and construction (EPC) projects; hi-tech manufacturing; and services. Its segments include infrastructure projects, energy projects, hi-tech manufacturing, IT and technology services, financial services, development projects, and others.
    • IRB Infra: It is an India-based infrastructure development company. The company is engaged in constructing roadways and highways. The company is involved in EPC projects and operation and maintenance across all of its businesses. It has a market cap of Rs 22,495 crore.
    • PNC Infratech: It is an India-based infrastructure construction, development, and management company. The company is primarily engaged in the areas of infrastructure projects, including highways, bridges, flyovers, power transmission lines, airport runaways, and other infra activities. It holds a market cap of Rs 9,025 crore.
    • KNR Constructions: Holding a market cap of Rs 7,693 crore, this company is an India-based company involved in infrastructure development. It is engaged in the construction of roads, bridges, flyovers, and irrigation projects. Its projects include highway projects, irrigation and water management, river bridges, and urban development.
    • HG Infra Engineering: The services of this company include EPC projects, maintenance of roads, bridges, flyovers, and other infrastructure contract works. It has a clientele of both the government as well as private sectors. The market cap of this company stands at Rs 5506 crore.
    • Other notable companies in the sector include Ashoka Buildcon, Bharat Road Network, Dilip Buildcon, and GMR Airports.
  6. The current market trend for road and highway stocks in India is positive, driven by factors such as the government's infrastructure push, increasing traffic congestion, improved connectivity and logistics, and tourism and economic growth.
     

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