The infrastructure sector is into a boom phase since the past six to seven months, Vijay Kedia, investor and director of Atul Auto, said in an interaction with Moneycontrol on August 29.
The market veteran believes that the infrastructure sector will see the similar trends it had seen during 2003 to 2007. The primary reason for latest boom, according to Kedia, is the increased government spending on infrastructure.
“Additionally, the private sector capacity has also reached around 75 to 80 percent. So, this is the high time from where private capital expenditure (capex) will start,” he said.
Between 2003 and 2007, capex was primarily centred around conventional industries like thermal energy, roads and railways, construction, and real estate. In contrast, the present cycle of capex is more diverse, concentrating on improving and modernising emerging sectors, with a strong emphasis on manufacturing.
The primary areas of attention include development of renewable energy, transitioning to cleaner energy sources, adopting electrification for vehicles and railways, promoting manufacturing through initiatives like production-linked incentive (PLI) scheme, localisation, indigenisation, modernising railways, advancing mobility through metro systems and high-speed rails, and strengthening the defence sector.
Also read: The bull market in India will continue for 7 to 8 years: Vijay Kedia
Any company related to the infrastructure sector is set to benefit as this theme enters into a bullish phase, Kedia said, highlighting that this uptrend could last for up to four-six years.
He is strongly bullish on the sector and considers infrastructure to be a “red hot theme”.
The Nifty Infra index traded flat at 5,981.15 on August 29. The index has delivered a return of 18.55 percent over the past one year, and 82.50 percent over the past five years.
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