Best Infrastructure Stocks In India In September 2024 – 5-Year CAGR Basis

India’s growth in 2024 and beyond will be strongly driven by major advancements in key sectors, with infrastructure development playing a crucial role. Infrastructure is essential for India to become a US $26 trillion economy. The government has demonstrated its commitment to future infrastructure through several recent initiatives. The US $1.3 trillion national master plan, Gati Shakti, aims to bring significant reforms to the sector and has already made notable progress. In this article, you will learn about the best infrastructure stocks in India in the stock market.

Best Infrastructure Stocks in September 2024 – 5-Year Cagr Basis

Note: The best infrastructure stocks list are selected from the Nifty 500 universe and sorted based on 5-year CAGR as of September 05, 2024.

Overview of Top Infrastructure Stocks in India

1. IRB Infrastructure Developers Ltd

IRB Infrastructure Developers Ltd is a well-established company in India that specialises in infrastructure development and construction. They are particularly experienced in building and maintaining roads and highways. Their work also extends to airport development and real estate, making them versatile in the infrastructure sector.

For the quarter ended June 2024, the company’s revenue decreased to ₹1,254.41 crore from ₹1,425.95 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹141.84 crore from ₹313.57 crore in the previous quarter.

Key metrics: 

• Earning per share (EPS): ₹1.32
• Return on equity (ROE): 8.37%

2. Ircon International Limited

Ircon International Limited (IRCON) started in 1976 as a railway construction company. Since 1985, it has expanded its operations and now works as a state-owned engineering and construction firm. IRCON handles large and complex infrastructure projects in sectors like railways and highways.

For the quarter ended June 2024, the company’s revenue decreased to ₹2,180.48 crore from ₹3,648.98 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹176.51 crore from ₹285.68 crore in the previous quarter.

Key metrics: 

• EPS: ₹9.33
• ROE: 15.21%

3. Praj Industries Ltd

Praj Industries Ltd, established in 1983, is a top biotechnology and engineering firm with a global presence. They provide eco-friendly solutions in areas like bioenergy, water purification, process equipment, breweries, and wastewater treatment. The company is dedicated to environmental, energy, and farm-to-fuel technologies. They have offices in Thailand, the Philippines, and the USA.

For the quarter ended June 2024, the company’s revenue decreased to ₹600.66 crore from ₹839.28 crore in the preceding quarter. Meanwhile, the net profit increased to ₹91.84 crore from ₹75.52 crore in the previous quarter.

Key metrics: 

• EPS: ₹17.58
• ROE: 25.62%

4. GMR Infrastructure

GMR Infrastructure is involved in various activities, including developing, maintaining, and operating airports, power generation, coal mining, and exploration. They also focus on building highways, managing special economic zones, and handling construction projects, which include Engineering, Procurement, and Construction (EPC) contracting. The company was founded in May 1996 in Andhra Pradesh.

For the quarter ended June 2024, the company’s revenue increased to ₹202.34 crore from ₹26.89 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹-145.66 crore from ₹75.52 crore in the previous quarter.

Key metrics: 

• EPS: -₹0.11
• ROE: -0.34%

5. Nagarjuna Construction Company Limited

Nagarjuna Construction Company Limited (NCCL), founded in 1978, began as a partnership and became a limited company in 1990. It is the first Indian construction firm to be recognized as ‘Best Under a Billion’ in the Asia Pacific region. With regional offices across India and international locations in Dubai and Muscat, NCCL operates various divisions, including Pre Fab, Electrical, Water & Environment, Power, Metals, and Oil & Gas. It established a Property Division in 1996 and a Transportation Division in 1998.

For the quarter ended June 2024, the company’s revenue decreased to ₹4,713.28 crore from ₹5,446.02 crore in the preceding quarter. Meanwhile, the net profit increased to ₹200.74 crore from ₹187.36 crore in the previous quarter.

Key metrics: 

• EPS: ₹10.67
• ROE: 9.83%

Infrastructure Sector Outlook

India needs to invest US$ 840 billion in urban infrastructure over the next 15 years to keep up with its growing population. This investment must include long-term maintenance of buildings, bridges, ports, and airports to be effective and sustainable.

Digitalisation and opportunities in Tier II and III cities are narrowing the gap between metro and non-metro areas. Demand for commercial real estate in these smaller cities is rising as IT, IT-enabled services, and financial institutions decentralise their operations. Residential sales and launches have also increased, with top-7 cities projected to see over 360,000 unit sales in 2022.

The Civil Aviation Ministry’s “Vision 2040” report plans for 190-200 airports by 2040, with Delhi and Mumbai each having three international airports. Additionally, 220 destinations under the UDAN scheme are expected to be completed by 2026, connecting unserved areas with 1,000 new routes.

Conclusion

Infrastructure stocks are key to shaping India’s growth and development, which is why they are becoming more popular. Investing in the best infrastructure stocks can offer strong returns over time. However, make sure to do proper research about the company’s financials, consider the timeline of your investment, and understand the growth potential of the infrastructure sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.