Infra stocks rise as market expects increased capex, new project announcements in Budget 2024

Stocks like KNR Constructions, PNC Infratech, RITES, KEC International, J Kumar Infraprojects, and Ahluwalia Contracts are among the stocks that Axis Securities expects to be in focus because of the continued thrust on infrastructure.

Construction and infrastructure stocks surged a day ahead of the Union Budget 2024 as investors anticipated significant capex announcements. Analysts expect the government to maintain its Rs 11.1 lakh crore capex estimate from the Interim Budget.

Axis Securities highlights that a continued focus on roads, power, urban development, and railways will provide long-term economic benefits. The brokerage anticipates a substantial increase in infrastructure spending to support the National Infrastructure Pipeline and Gati Shakti Master Plan.

Shares of Ashoka Buildcon, KNR Constructions, NBCC, Man Infraconstruction, J Kumar Infraprojects, PSP Projects and other construction, and infra-related stocks gained up to 8 percent on July 22.

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Key sectors such as roads, railways, airports, and urban infrastructure are expected to see increased funding, including for projects like Bharatmala and Sagarmala. An increase of 10-15 percent in the Ministry of Road Transport & Highways allocation is anticipated.

Additional funds may be allocated to major projects like Jal Jeevan Mission, High-Speed Rail, Smart Cities, and Inland Waterways Development.

Tata Projects has called for increased private capital expenditure to boost sector growth, while Finance Minister Nirmala Sitharaman's Interim Budget raised infrastructure capex by 11.1 percent.

With a heightened focus on developing highways, railways, and urban infrastructure, companies in these segments are poised for significant opportunities, said Axis Securities.

Stocks like KNR Constructions, PNC Infratech, RITES, KEC International, J Kumar Infraprojects, and Ahluwalia Contracts are among the stocks that Axis Securities expects to be in focus because of the continued thrust on infrastructure.

Additionally, major highway projects are likely to drive demand for cement, benefiting companies such as UltraTech Cement and Ambuja Cements.

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The budget may also emphasize digital infrastructure, potentially offering incentives for data centers and smart cities, benefiting firms like Anant Raj. Enhanced focus on affordable housing could positively impact urban developers like MICL and TARC.

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