Ahead of the presentation of Union Budget 2025, investors are showing interest in road construction stocks. Stock markets opened weak on January 17. Pressure on major indices appeared to be increasing. Despite this, stocks of road construction companies were running in the green. Stocks of GR Infraprojects, KNR Construction, PNC Infratech were in the green at 11:30 am. Experts say that the government will increase the target of capital expenditure in the Union Budget on February 1. A major part of this will be spent on road construction.
India ranks second in the world in terms of road network.
India has reached second position in the world in terms of road network. The road network in India has increased to more than 67 lakh kilometers. Out of this, more than 14 lakh kilometers are highways. Now only America is ahead of India in terms of road network. The government has approved the Ministry of Road Transport and Highways (MoRTH) had allocated Rs 2.72 lakh crore. Out of this, around Rs 1.75-1.8 lakh crore is expected to be spent till December. Only 2,500 km of road projects were awarded this financial year. This is down from 3,100 kilometers in the same period previously.
Allocation of Rs 2.9 lakh crore expected
Experts say that in the Union Budget 2025, the government can allocate Rs 2.85-2.9 lakh crore for MoRTH. This will be an increase of 5-6 percent. The government does not want to increase the debt burden on NHAI. NHAI already has a debt of Rs 2.8 lakh crore. The government believes that the interest of companies in the new Build-Operate-Transfer (BOT) model will increase. With this, companies will come forward to bid for road projects. With this, NHPC will not have to take a new loan.
Good performance of road construction companies
Market experts say that stocks of road construction companies have given good returns to investors in the last 1-2 years. The compound annual growth rate (CAGR) of major road construction companies like GR Infraprojects, KNR Constructions, PNC Infratech and Dilip Buildcon has been between 15 to 20 percent. Analysts say that despite good returns, the valuation of these shares is attractive. Investing now can yield good profits after the budget.
Investment opportunities in these companies
On January 17, at 11:50 am, the share price of PNC Infratech was up 0.52 per cent at Rs 306. Shares of KNR Constructions were trading at Rs 320, up 0.11 per cent. Shares of Dilip Buildcon were at Rs 420 with a slight fall of 0.17. The stock of GR Infraprojects was trading at Rs 1,324 with a weakness of 0.19 per cent. The stock had a strong open in the morning. Later it came into red mark.