The Union Budget 2015-16 is likely to provide a boost to the infrastructure sector to push economic growth by outlaying larger resources for the sector.
Larsen and Toubro
Sector leader is likely to do well if the government lays an emphasis on the infra sector. The quarterly results of L&T lagged estimates and the stock has seen some reaction. At the current market price the stock remains an attractive buy around the Rs 1550 levels.
There are some concerns for the stock in the short term on account of the poor guidance especially because of the slowdown in the hydrocarbon sector.
Nonetheless, the stock remains a value pick on account of strong recovery expected in the domestic markets. It remains a good buy on dips opportuity.
HCC has a solid pedigree and is associated with some of the finest infra projects in the country including the Bandra Worli Sea Link, Delhi Metro, Lavassa etc. Again, like NCC the company reported a robust set of results for ther quarter ending Dec 31, 2014.
The net profit stood at Rs 27.1 crore compared to Rs 5.4 crore in the corresponding period last year.
The current order book stands at a staggering Rs 14,307 crore. The company like most other peers in the business is likely to benefit from a decline in interest rates and arebound of economic growth in the country.
At around Rs 35, the stock remains a good buy considering its small equity base. A good proxy for the infra sector given its huge presence in almost every area of the infra sector.
NCC is another stock that remains a good buy. The company is into a host of areas covering the infrastructure area including roads, water and environment, irrgation, power and oil and gas.
The company reported a decent set of profits for the quarter at Rs 42 crores as against a loss reported in the corresponding period of last year.
A fall in interest rates and an uptick in the economy is likely to benefit a company like NCC. Analysts are bullish on the NCC counter and suggest a buy.