J Kumar Infra, L&T, other EPC firms rally as investors bet big on policy continuity hopes in Maharashtra

The BSE India Infrastructure index also jumped 3.5 percent in trade.

With the NJP-led Mahayuti alliance sweeping the Maharashtra polls, investors doubled down on the infrastructure theme amid expectations of policy continuity.

Analysts expects the capex cycle, which slowed in the first half, to improve significantly in the second half of the current fiscal. This is will pose a positive to EPC (engineering, procurement and construction) firms, as a result, listed players recorded gains of up to 16 percent in trade so far on November 25.

J Kumar Infraprojects surged 16 percent intraday, while L&T surged 4.2 percent. Other players such as Ashoka Builcon, IRB Infrastructure Developer, Afcons Infrastructure, GR Infra all recorded gains between 3-8 percent. The BSE India Infrastructure index also jumped 3.5 percent in trade.

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Ahead of the elections, the government had tendered a number of infrastructure projects, with lowest bidders being declared for many of them. There were certain concerns with respect to the delay in awards, in case a new government took power.

However, with the incumbent returning to power with a resounding majority, domestic brokerage Emkay Global shared that it is unlikely to be delayed further.

During the first seven months of the current financial year, the government had awarded projects worth Rs 1.5 lakh crore, across roads, railways, real estate and other sectors. L&T, HG Infra, J Kumar Infra, Ashoka Buildcon and GR Infra are key players in this market, especially in the Maharashtra region.

Among all the listed players, the Maharashtra government had awarded key orders to these companies: GR Infra ( Rs 5,300 crore), J Kumar (Rs 6,000 crore), HG Infra (Rs 4,100 crore), Ashoka Buildcon (~ Rs 4,000 crore), Welspun Enterprises (Rs 3,800 crore) and Afcons Infrastructure (Rs 3,500 crore).

For HG Infra, two recent projects from the Maharashtra State Road Development Corporation (MSRDC) comprise 25 percent of the firm's overall order book of Rs 16,000 crore.

GR Infra's recently won projects in Maharashtra comprise around 25 percent of its Rs 20,000 crore order book. Over 20 percent of Ashoka Buildcon's orderbook are projects that are also based in Maharashtra.

J Kumar Infraprojects recently won a few orders in Maharashtra, which clock in at 32 percent of its orderbook of Rs 18,700 crore. When all its orders are taken into consideration, orders from Maharashtra are around 64 percent of its order book.

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