Capital expenditures, also known as capital expenses, are sums of money used by businesses to expand, buy, or maintain fixed assets.
According to a financial express, the Ministry of Road Transport and Highways (MoRTH) will probably spend Rs 3.2 trillion on capital projects in the upcoming fiscal year, a 25% annual increase.
This suggests that the important infrastructure sector, which has long suffered from a lack of private risk capital and has recently relied entirely on budgetary funding rather than borrowing, will stick to the same plan to maintain capital expenditure pace during the upcoming fiscal year.
The ministry has built 4474 km of highways for Rs 1.66 trillion, or 64% of its budget, in the first seven months of this year. 13,800 km of highway construction is the goal for this year, and the revised estimates for the year may call for additional funding.
Along with the aforementioned passage, the ministry has created a 25-year action plan to mark the end of its 100 years of independence, just like other departments have. This program includes a 20-year plan to build 50,000 km of highways at an estimated cost of Rs 20 trillion over the next 20 years.
Here are 4 stocks that can benefit from this development project.
Larsen & Toubro Ltd
With a market capitalization of Rs 4,48,442.63 Crores. Larsen & Toubro Ltd, On Friday, The shares closed at Rs 3,189.95 a share, an increase of 2.52 percent from the previous closing price.
In addition to being highly diversified, Larsen & Toubro Ltd.’s order book, which is currently at a record high of Rs. 4 lakh crore, also offers multiyear revenue visibility. With a 17% year-over-year growth, the Group’s revenues for the year came to Rs 1.8 lakh crore, the highest level in the previous five years.
Larsen & Toubro Ltd. reached several new benchmarks in the year that are being reviewed. Your Company recorded an annual Order inflow of over Rs 2 lakh crore for the first time.
IRB Infrastructure Developers.
With a market capitalization of Rs 22,579.82 Crores. IRB Infrastructure Developer Ltd, On Friday, The shares closed at Rs 37.39 a share, an increase of 0.70 percent from the previous closing price.
As of June 30, 2023, the company’s total order book, including the Hyderabad ORR project, was Rs 33,708 crores. The construction segment’s EPC order book, which is close to Rs 8,423 crores, offers good revenue visibility for the next two to three years. This is further supported by an executable O&M order that is close to Rs 2,500 crores to Rs 3,000 crores for three years.
In October 2023, NHAI grants this Letter of Award (LoA) to IRB Infrastructure Trust (Private InvIT) for a sum of Rs. 4,428 Crs. Lalitpur-Lakhnadon Project (NH44, TOT-12) for the 20-year revenue-linked concession.
PNC Infratech Ltd.
With a market capitalization of Rs 8,579.95 Crores. PNC Infratech Ltd, On Friday, The shares closed at Rs 334.45 a share, a decrease of 1.08 percent from the previous closing price.
With new contracts signed in FY 2022–2023 included, PNC Infratech Ltd.’s total order book stood at ₹ 20,500 Cr. as of March 31, 2023, offering a strong revenue visibility for the ensuing two years. With 33% of its pending orders coming from water and canal projects and the remaining 67% coming from the roads and highway sectors, the company is still working on its diversification strategy.
The Company obtained new mandates totaling over ~ 4,855 Cr during FY 2022–2023. Its consistent presence in the roads and highways industry along with this new business stream helped the company reduce the risks associated with concentration.
H.G. Infra Engineering Ltd
With a market capitalization of Rs 5,619.70 Crores. H.G. Infra Engineering Ltd, On Friday, The shares closed at Rs 862.30 a share, an increase of 1.51 percent from the previous closing price.
H.G. Infra Engineering Ltd, With 2,500+ modern equipment and 4,000+ personnel, the order book grew to 25,000+ million. 15 highway projects (11 HAM, 4 EPC), 1 metro project, 1 RVNL project, and 1 station project were awarded. The order book also diversified beyond roads and highways.
The National Highways Authority of India (“NHAI”) issued an order to H.G. Infra Engineering Ltd. for Rs. 1,303.11 Cr. for the construction of a 6-lane greenfield Varanasi-Ranchi-Kolkata highway in the State of Jharkhand. The project will take place between Deoria village and Donoreshan village, spanning from km 253.000 to km 288.600. The project is part of the Bharatmala Pariyojana.
Written By:- Abhishek Singh
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