Best Infrastructure Stocks in India 2024

Infrastructure stocks refer to the shares of companies that are involved in the development and maintenance of essential public works and facilities. This includes power plants, roads, bridges, and telecommunications networks. These stocks are important as they play a crucial role in economic growth and facilitating the smooth functioning of various industries. The government has launched a $1.3 trillion national master plan for infrastructure, called Gati Shakti. This has boosted the overall performance of infrastructure stocks. In the last year, the Nifty50 index increased 21.21% and the Nifty Infrastructure Index gained 56.93%. Let’s explore some of the best infrastructure stocks in India listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) in this blog. 

Infrastructure Stocks List on NSE and BSE

India believes that improving infrastructure is crucial for progress. This leads to an increase in the demand for investing in the best infrastructure stocks in India. The following is the breakdown of some of the best infra stocks in India, listed on NSE and BSE.

Disclaimer - All the stock prices, market capitalisation, net profits, and P/E ratios mentioned above are accurate as of 9th July 2024. However, it's important to conduct thorough research before making any investment decisions in these stocks.

Overview of Best Infrastructure Stocks

The following is the overview of the above-mentioned infra stocks in India.

Adani Ports

Adani Ports and Special Economic Zone (APSEZ) is the largest commercial port in India. It handles around one-fourth of all cargo movement in the country with a strong presence at 13 domestic ports. The port facilities are modern and can accommodate large ships coming to India's shores.

• The company has a good dividend payout of 19.3%
• The company’s working capital requirements have improved from 26.3 days to 19.2 days.
• The operating profit of the firm in the last quarter of FY 24 stands at Rs. 3,995 crores.

Reliance Infrastructure Ltd

Reliance Infrastructure Ltd is a leading infrastructure company in India developing infrastructure projects through Special Purpose Vehicles (SPVs) in various sectors like Power, Transport, Metro Rail, and Defence. The company also has a significant presence in the utility sector, including generation, transmission, distribution, and power trading.

• The debtor days of the company have reduced from 48.8 to 28.2 days.
• The company generated Rs. 15 crores of profit before tax in the fourth quarter of FY 24.
• The compounded sales growth of the company for the last 3 years is 8.5.

HFCL Ltd

Himachal Futuristic Communications Limited (HFCL Limited) is a multifunctional telecommunications infrastructure provider. These include network design, system integration, manufacturing cutting-edge communications equipment, optical fibre, and optic fibre cable (OFC) manufacture and distribution.

• The sales of the company increased to Rs. 1,326 crores in the last quarter of FY 24.
• The operating profit of the firm stands at Rs. 196 crores in the fourth quarter of FY 24.
• The company’s stock price CAGR for the previous 5 years is 43%.

Dilip Buildcon Limited

Dilip Buildcon Limited is a large infrastructure company that started residential real estate business and later diversified into building petrol pumps and government projects. Its customers include the National Highways Authority of India, the Madhya Pradesh Road Development Corporation Ltd., and the Ministry of Road Transport and Highways.

• The return on capital employed (ROCE) of the company is 10.7%.
• The working capital requirement of the company has reduced from 145 to 110 days
• The company has a total assets worth Rs. 16,647 crores.

Rites Limited

Rites Limited is a multidisciplinary consultancy firm owned by the Indian government. It offers services in transport, infrastructure, and related technologies.  Its covers various sectors like highways, railways, metros, urban engineering, sustainability, ports, airports, ropeways, inland waterways, etc. 

• The company is almost debt-free.
• At present, the company’s dividend payout stands at 88.3%.
• The company reported a net profit of Rs. 137 crores in the last quarter of the fiscal year 2023-24.

GMR Airport Infrastructure Ltd

GMR infrastructure focuses on developing, maintaining, and operating airports, power generation, coal mining, highway development, and operation of key economic zones. The company is also involved in construction activities like engineering, procurement, and construction (EPC) contracting.

• The company’s sales have grown considerably to Rs. 2447 crores in the last quarter of FY 24.
• The stock price CAGR of the company stands at 48%.
• The total worth of the firm’s fixed assets is Rs. 28,741 crores.

Techno Electric Engineering Company

Techno Electric and Engineering Company Limited (TEECL) is engaged in the production of various products involved in the electrical industry. It has expertise in both light construction and heavy engineering segments of the power sector.

• The company is almost debt-free.
• The compounded sales growth of the company for the last 3 Years stands at 19%.
• The company’s compounded profit growth for the last 3 Years is 23%.

G R Infraproject Stocks

G R Infraprojects Ltd. is an engineering, procurement, and construction (EPC) company with a focus on roads. Established in 1995, the organisation has a successful track record and specialises in planning road and highway projects across 15 Indian states. 

• The return on capital employed (ROCE) of the company is 17%.
• The company’s current return on equity (ROE) stands at 15.7%.
• The stock price CAGR of the company in the last year is 35%.

What does Infrastructure Mean?

Infrastructure refers to the basic systems and facilities that are essential for a country, region, or community to function properly. These systems enable various activities and services. Infrastructure systems are usually large-scale and demand significant investment to build and maintain. Governments, private companies, or a combination of both may fund and manage these projects because they are crucial for a country's economic development and the overall quality of life for its citizens.

Some examples of infrastructure include the following

• Transportation systems like roads, bridges, railways, airports, and ports. These help in the movement of people and goods.
• Communication networks such as telephone lines, internet cables, and broadcasting systems. These help people to communicate and share information.
• Utilities like water supply, sewage treatment plants, and electricity grids. These provide basic amenities for households and businesses.
• Public services like schools, hospitals, and public spaces. These support education, healthcare, and community well-being.

Future of Infrastructure Sector in India

The Indian government is putting a lot of effort into improving the country's infrastructure. It has set aside a big part of the budget, which is 3.3% of the GDP, for infrastructure development in the year 2024. The main focus is on transportation and logistics, like building more roads, highways, railways, public transport in cities, airports, and waterways. The government has made some ambitious plans, such as building a 2 lakh-km national highway network by 2025, increasing the number of airports to 220, and making 23 waterways operational by 2030.

The government is also encouraging partnerships with private companies. These public-private partnerships (PPPs) are very important because they bring in much-needed money, new ideas, and efficient ways of working. PPPs help to fill the gap in funding, create competition, and promote the use of new technologies and best practices in carrying out projects. The future of the infrastructure sector in India looks bright, with the government's strong commitment, ambitious goals, and support for private partnerships. 

Types of Infrastructure Systems in India

India has developed a good network of infrastructure systems to support its growing economy and meet the needs of its increasing population. These systems are categorised into the following.

1. Energy Infrastructure

This includes power generation plants such as thermal, hydro, nuclear, and renewable sources. This further helps in producing electricity. It is an extensive network of transmission lines and distribution systems that supply power across the nation.

2. Rural Infrastructure

This category focuses on rural well-being and development. The rural road networks connect remote villages. This leads to improving accessibility and mobility. Additionally, it focuses on the agricultural sector.  This includes irrigation systems, storage facilities, and market yards, which support the farming sector.

3. Urban Infrastructure

This category aims to improve urban living through technology-driven solutions. Additionally, it includes water supply systems and sanitation facilities that ensure access to clean water and proper waste management.

4. Industrial Infrastructure

It includes industrial parks and special economic zones to attract investments and support manufacturing operations. Ports along the coastline facilitate international trade and maritime activities.

5. Transportation Infrastructure

This includes roads and highways. This connects cities, towns, and villages which ultimately enables the movement of goods and people. Additionally, the commendable railway network efficiently transports passengers across the country. Airports allow domestic and international air travel.

Conclusion
Investing in infrastructure stocks in India can be a good opportunity. The Indian government is heavily focused on improving the country's infrastructure like roads, railways, airports, and utilities. However, one should be aware of the risks this sector carries and invest accordingly. They have set aside a large part of the budget for infrastructure development. The government is also encouraging partnerships with private companies to bring in funding, expertise, and better project execution. To invest in the best infrastructure stocks in India, one is suggested to use a safe and efficient online stock trading app.