India’s infrastructure is vital in its journey towards becoming a $5 trillion economy by 2025. Investing in infrastructure stocks could be a smart move, especially in a rapidly growing economy like India. With the government consistently prioritizing infrastructure development, these stocks hold the potential for strong returns. Plus, they offer stability and long-term growth. So, let’s dive into an industry overview and take a detailed look at:
What is infrastructure?
Sectors where one can find the best infrastructure stocks in India for investment
Which are the best infrastructure stocks in India?
What is infrastructure?
Infrastructure is a term generally used for describing the basic physical systems of a business, geographical area, or country. Transportation systems including roads, railways, ports and airports, communication networks such as mobile phone towers, telecommunication systems and lines, drainage systems, water pipes, and processing units, and electricity plants and grids are some of the best examples of infrastructure. Infrastructure systems are highly capital intensive and considered the backbone of a country’s economic development and prosperity. Infrastructure projects are usually funded publicly (sponsored by the government) or privately or through public-private partnerships.
The infrastructure sector in India can be broadly classified into segments such as power, airports, aerodromes, railways, ports, bridges, flyovers, dams, roads, and urban infrastructure development.
The transport infrastructure sector in India which was earlier plagued by countless problems and costly delays has witnessed a drastic change under the leadership of Union Road Transport and Highways Minister Nitin Gadkari. He has been instrumental in reviving stalled highway projects and speeding up the pace at which highways are being constructed in India. From a construction rate of just about 12 km per day in 2014-15, the rate has reached 34 km a day during FY2024. The total per year construction is expected to touch 89,900 km by 2037. India has achieved this world record of constructing the fastest highways in the world despite the disruption caused by the Covid 19 pandemic that had abruptly halted construction for few months from April 20.
A framed quote by former American president John F Kennedy prominently displayed in his office reveals how serious he is about infrastructure development in the country.
“American roads are good not because America is rich. America is rich because American roads are good.”
The government has allocated 3.4% of the GDP to infrastructure development in the latest Union Budget to push the country’s infrastructure further. This is Rs.11.11 lakh crore, 11% more than the previous budget allocation. Additionally, Rs.1.5 lakh crore is provided to states as long-term, interest-free loans to help with resource allocation.
The Ministry of Road Transport and Highways was given Rs.2.78 lakh crore, with Rs.1.68 lakh crore dedicated to the National Highways Authority of India (NHAI) for developing national highway corridors under the Bharatmala Pariyojana. Furthermore, PM Gram Sadak Yojana Phase 4 is set to be launched soon.
The Union budget 2024-25 also announced a capital expenditure of Rs 2,62,200 crore for railway infrastructure development, the highest railway allotment. The budgeted expenditure was set to focus on introducing more passenger trains and improving the protection system.
Sectors where one can find the best infrastructure stocks in India for investment
The push for infrastructure development in the country is likely to benefit many companies operating in the engineering and capital goods sector that possess the capacity to build and execute large projects. As cement is a critical construction component, cement manufacturers will benefit immensely. Some of the best stocks to buy can be found in the cement sector, too.
Infrastructure development in the country acts as a big GDP multiplier and is considered the most significant enabler for socio-economic growth. India needs a robust infrastructure to support its leap towards becoming a USD 5 trillion economy. Many businesses participating in this mammoth infrastructure development will likely outperform over the next few years. The best part is that many such stocks are currently available at reasonable valuations due to market corrections in the last few months.
Which are the best infrastructure stocks in India?
The list of top infrastructure stocks on the NSE as per the market capitalization is as follows-
| Company Name | Last Price | % Change | 52 wk High | 52 wk Low | Market Cap (Rs. cr) |
| JSW Infra | 316.75 | -0.81 | 360.95 | 119 | 66,517.55 |
| Power Mech | 6,552.95 | -1.45 | 7,450.00 | 3,364.95 | 10,359.00 |
| HG Infra Engg | 1,534.65 | -0.14 | 1,879.90 | 805.1 | 10,001.48 |
| Va Tech Wabag | 1,266.10 | 0.40 | 1,420.00 | 435.45 | 7,873.93 |
| Indian Hume | 557.95 | -1.20 | 613.70 | 211.65 | 2,939.38 |
| Jyoti Structure | 27.88 | 0.50 | 35.30 | 10.3 | 2,362.41 |
| OM Infra | 180.94 | -3.02 | 227.90 | 61.7 | 1,742.52 |
| Likhitha | 430.95 | 0.36 | 497.45 | 230.15 | 1,700.10 |
| Ganesh Green | 427.55 | -2.77 | 587.95 | 190 | 1,060.37 |
| Effwa Infra & R | 317.55 | -4.84 | 389.15 | 82.00 | 735.04 |
Overview of the infrastructure stocks:
JSW Infrastructure Limited, founded in 2006, offers maritime services like cargo handling, storage, and logistics. Being part of the JSW Group, it’s India’s second-largest commercial port operator in terms of cargo handling capacity. It also operates two port terminals in the UAE with a capacity of 41 MTPA. In February 2024, JSW signed a concession agreement with Jawaharlal Nehru Port Authority for two liquid berths totaling 4.5 MTPA. The company has a total cargo handling capacity of 170 MTPA. Its IPO in September 2023, priced between Rs.113-119 per share, was oversubscribed 37 times. For FY2024, JSW’s financial performance improved significantly, with net debt dropping to Rs.65 crore from Rs.2,216 crore the previous year and earnings reaching Rs.4,032 crore.
Power Mech Projects Limited:
Power Mech Projects Limited, founded in 1999, is an engineering and construction company specializing in the erection, testing, and commissioning (ETC) of boilers, turbines, and generators. It also handles the balance of plant (BOP), civil works, and operation and maintenance (O&M). The company takes on ultra-mega power projects, as well as supercritical and subcritical thermal power projects.
Power Mech is the largest O&M service provider, with both backward and forward integration. It operates through five strategic units: Industrial Services, Industrial Construction, Infrastructure Construction, Manufacturing & Heavy Fabrication, and Mining. The company has a global presence in Saudi Arabia, Oman, Kuwait, Bangladesh, Nepal, Bhutan, and Nigeria. As of FY2024, Power Mech’s order book stood at Rs.57,053 crore, with a total revenue of Rs.4,234 crore. The company achieved a PAT margin of 5.9%, resulting in a profit after tax (PAT) of Rs.248.7 crore.
H.G. Infra Engineering Limited:
H.G. Infra Engineering Limited (HGIEL) is a top player in the roads and highways infrastructure sector, with over 21 years of experience. The company specializes in Engineering, Procurement, and Construction (EPC) services, focusing mainly on road construction, including bridges and flyovers. HGIEL also takes on Hybrid Annuity Model (HAM) projects selectively. Recently, it secured its largest EPC project, the prestigious Ganga Expressway.
In FY24, HGIEL launched two road projects worth Rs.1,370.11 crore and three railway projects totaling Rs.1,872.33 crore. Expanding into the solar power sector, HGIEL is contributing to India’s renewable energy goals. Under the KUSUM scheme, it has been awarded solar power projects totaling 543 megawatts DC, valued at Rs.1,307 crore. These projects include a collaboration with Jodhpur Vidhyut Vitran Nigam Limited and Stockwell Solar Services Private Limited for 528 megawatts DC. As of FY2024, HGIEL’s order book stands at Rs.12,434 crore, with a net profit of Rs.541.3 crore.
Va Tech Wabag Limited:
WABAG was founded by Max Reder in Breslau, Germany, in 1924 and led by Chief Engineer Alfred Kretzschmar. The company quickly became a pioneer in water treatment. WABAG designs, supplies, installs, and manages drinking water, wastewater treatment, industrial water treatment, and desalination plants. With expertise across the entire water solutions value chain, from design to operations, WABAG has completed over 6,500 municipal and industrial projects in 25+ countries, benefiting more than 8.8 crore people. As of FY24, it plays a key role in the Namami Gange program, treating over 190 crore liters of water daily. In 2024, WABAG also won the Energy Globe World Award for its sustainable “120 MLD JUBAIL Industrial City” project. The company reported a revenue of Rs.2,856 crore and a net profit of Rs.246 crore, with a net profit margin of 9% in FY24.
Indian Hume Pipe Company Ltd.:
The Indian Hume Pipe Co. Ltd. (IHP), founded in 1926, started with making and selling Hume Pipes and related products. Over time, IHP expanded its offerings to include Prestressed Concrete Pipes, Bar Wrapped Steel Cylinder Pipes, Welded Steel Penstocks, and more. The company also handles Turnkey Water Supply and Sewerage Projects. Today, IHP operates over twenty factories and is managing more than 100 projects across India. It plays a key role in enhancing the country’s infrastructure, including water supply, irrigation, drainage, power generation, and rail transport. IHP works on pipeline projects for water supply, sewerage, and hydroelectric power. It also supplies concrete sleepers for the modernization of railway tracks. Beyond India, IHP has completed projects in Nepal, Sri Lanka, Burma, Malaysia, and Iraq. In FY2024, IHP’s profit after tax was Rs.77.63 crore, up from Rs.55.7 crore in FY2023.
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Read more: How Long-term investing helps create life-changing wealth – TOI.
I’m Archana R. Chettiar, an experienced content creator with
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