Cabinet greenlights 12 industrial smart cities; which stocks should you keep on radar?

This Rs 28,602 crore-investment plan, set to unfold over the next three years, will drive growth in various industries

The Cabinet's nod for development of 12 industrial smart cities across 10 states is expected to boost industrial stocks, particularly in the metals, cement, and construction sectors. Analysts predicted that this Rs 28,602 crore-investment plan, set to unfold over the next three years, will drive growth in various industries, including electric vehicles, food processing, and textiles.

Construction companies like HCC and NCC are likely to benefit from this initiative due to an anticipated increase in order inflows. At the same time, industrial equipment suppliers such as Siemens India and ABB India are poised to gain from the government's emphasis on bolstering manufacturing capabilities, said Atul Parakh, CEO of Bigul.

Amit Goel, co-founder and chief global strategist at Pace 360, shared this optimistic outlook, highlighting L&T's potential to emerge as a major beneficiary. L&T's expertise in executing large-scale projects positions it as a strong candidate for contracts related to these new industrial hubs, he pointed out. The company has a proven track record, having previously secured smart city project orders for cities like Nagpur, Pune, Patna, Faridabad, Tirupati, and Ranchi.

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In addition, technology giant TCS is expected to see significant benefits from the development of these smart cities. As Goel pointed out, the demand for advanced technology solutions, including IT infrastructure, cybersecurity, and data analytics, will rise. TCS, a leader in India's first-generation eGovernance projects, is well-positioned to support these needs by enhancing government services through data analytics.

These smart industrial cities will be strategically located in key regions, such as Khurpia in Uttarakhand, Rajpura-Patiala in Punjab, Dighi in Maharashtra, Palakkad in Kerala, Agra and Prayagraj in Uttar Pradesh, Gaya in Bihar, Zaheerabad in Telangana, Orvakal and Kopparthy in Andhra Pradesh, and Jodhpur-Pali in Rajasthan.

Under the National Industrial Corridor Development Programme, these hubs will blend residential, commercial, and industrial zones, supporting industries like technical textiles, fabrication, electric vehicles, aero logistics, food processing, and tourism. These developments are aimed at driving the government's goal of achieving $2 trillion in exports by 2030.

As these smart cities will require significant construction efforts, companies such as Tata Steel, NBCC, and Ultratech Cement are also expected to benefit. Goel noted that UltraTech Cement, as the largest cement producer in India, is well-positioned to capitalise on the increased construction activity associated with the industrial smart cities project.

Furthermore, the Cabinet has approved Rs 4,136 crore in equity support for northeastern states to develop hydropower projects with a total capacity of 15,000 MW over the next eight years. This move places renewable energy companies like Tata Power, NHPC, and NTPC in a favorable position. On the other hand, Elara Securities expects SJVN and NHPC, which specialise in hydroelectric power to benefit the most from rising investments.

Meanwhile, new measures meant to expand the Agricultural Infrastructure Fund scheme is expected to provide prospective tailwinds to the cold chain and food processing sectors, with Blue Star and ITC stocks standing to benefit, shared Parakh of Bigul. The fund is primarily concentrated on strengthening post-harvest agricultural infrastructure.