Relaxed norms, inv to boost road sector growth: Religare

Relaxed norms by the government and 90 percent completion of land acquisition for roads in FY16 will boost the growth in the road sector, Misal Singh of Religare Capital Markets told CNBC-TV18.The budgetary allocation has been increased substantially and even the National Highway Authority of India has doubled the funding to Rs 45,000 crore in FY16.Road requirement will increase to 5,400 kms in FY16 from 3,068 kms last year, which will help asset development and growth for engineering, procurement and construction (EPC) players, Singh said.

Singh recommends the leading player in the build, operate and transfer (BOT) segment – IRB Infrastructure. With expected improvement in traffic in next 12 to 18 months and stable balance sheet, IRB is a good bet, he said. In the EPC segment, Singh has a ‘buy’ rating on Sadbhav Engineering. With new BOT orders to be commissioned in coming months, EPC and mining business will boost growth, he said.