By continuing, you agree to LoansJagat's Credit Report Terms of Use, Terms and Conditions, Privacy Policy, and authorize contact via Call, SMS, Email, or WhatsApp
Disclaimer: The information published on LoansJagat is intended for general informational and educational purposes only and should not be considered financial, legal, or investment advice. Interest rates, loan terms, statistics, and other data may change over time and may vary by lender or source. Please verify the latest information and consult a qualified financial advisor or the respective Bank/NBFC before making any financial decisions.
Apply for Loans Fast and Hassle-Free
Subscribe Now
About the author
LoansJagat Team
‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.
Related Blog Post
Simplify All Your Loans Into One Affordable EMI
Customers Served
Debt Consolidated
1200+ Reviews
Locations in India
Club all Loans & Credit Card Bills into Single EMI
Quick Apply Loan
Consolidate your debts into one easy EMI.
Takes less than 2 minutes. No paperwork.
10 Lakhs+
Trusted Customers
2000 Cr+
Loans Disbursed
4.7/5
Google Reviews
50+
Banks & NBFCs Offers
Other services mentioned in this article
For example, you invested ₹1,00,000 in IRB Infrastructure last year when the share price was ₹40, which is 2,500 shares.
Now, let’s say the government announces ₹2,00,000 crore for highways, and IRB gets ₹20,000 crore worth of contracts. That’s 2.5 times what they made last year (₹8,000 crore). This could mean big growth for IRB, making your investment even more valuable!
Imagine if IRB's profit doubles and its stock price goes up. That ₹40 stock could rise to ₹80 or more.
Your ₹1,00,000 investment could turn into ₹2,00,000, just like that!
Pretty exciting. While tech stocks might have hit their peak, infrastructure is just beginning to grow. With strong government support, steady demand, and good dividends, infrastructure stocks could be a hidden gem in your portfolio.
Let’s look closer and see why this sector is worth watching!
Infrastructure stocks are shares in firms that construct and maintain roads, bridges, power lines, and the internet. These things keep a country operating. Governments tend to invest funds in these projects, which benefits these firms. Because individuals always require stuff like water, electricity, and transport, these firms tend to have stable demand and revenues.
Let’s say the Indian government announces a ₹10,00,000 crore ($120 billion) infrastructure spending plan over the next five years.
This includes:
Now, imagine a company like IRB Infrastructure, which builds highways, gets contracts worth ₹20,000 crore from this plan. If the company’s revenue was ₹8,000 crore last year, that’s a 150% jump in future revenue potential. Naturally, this can drive its stock price higher and increase dividends to investors.
1. Steady Demand:
Even when the economy is slow, people still use roads, electricity, and water. These companies continue earning no matter what.
2. Government Support:
Huge spending plans like the one above guarantee demand for infrastructure companies, leading to long-term growth and stability.
3. Consistent Returns:
Many of these companies pay regular dividends, and some offer fixed returns through InvITs (Infrastructure Investment Trusts).
4. Inflation Protection:
Infrastructure contracts often include inflation-linked pricing, meaning they automatically adjust for rising costs, helping investors keep pace with inflation.
5. Diversification:
You don’t have to invest in just one area. Infrastructure covers roads, energy, telecom, and water, spreading out your risk.
6. Big Projects for Small Investors:
With InvITs, even someone with ₹10,000 can invest in massive national projects that were once only for big players.
7. Better Opportunity Than IT Right Now:
According to expert Neeraj Dewan, IT stocks like TCS have already had big gains. Infrastructure stocks, however, are just getting started with room to grow.
8. Other Sectors to Watch:
Dewan also points to tourism, especially hotels and airlines, due to busy travel seasons and wedding events boosting demand.
Reason | Explanation |
Steady Demand | People always need things like roads, electricity, and water, even when the economy is not doing well. |
Government Spending | Big government plans worth ₹10 lakh crore create more work and help companies grow. |
Regular Income | Many companies give regular income through dividends or fixed returns using InvITs (Infrastructure Investment Trust). |
Here’s a list of some of the best infrastructure stocks in India, based on financial stability, growth potential, and market performance:
Stock Name | Market Cap (₹ Cr) | P/E Ratio | Dividend Yield (%) | 1-Year Return (%) |
Irb Infrastructure Developers Ltd | 283.90B INR |
Key Term | Meaning | How It's Calculated | Example |
Market Cap | Shows the total value of a company in the stock market. | Share Price × Number of Shares | If share price = ₹100, shares = 1 crore, Market Cap = ₹100 × 1 crore = ₹100 crore |
Let’s take an example: IRB Infrastructure Developers Ltd, a leading player in India’s road construction and toll operations sector.
As of now:
IRB works in an important area and gets support from the government, yet its stock has gone down. To understand why this is happening, let’s look at the main reasons that affect infrastructure companies like IRB.
Factors | Explanation |
Economic Factors | |
Economic Growth | When India's economy grows, more roads are built, benefiting IRB. If the economy slows, earnings may drop, causing the stock to fall. |
Interest Rates |
1. Company's Order Book:
What to Look For | Explanation |
Order Book | A large and diverse order book indicates future revenue potential. |
Example: Techno Electric & Engineering | As of the latest quarterly report, Techno Electric & Engineering has an order book worth ₹15,000 crore. This includes projects across multiple sectors: |
Power Transmission |
2. Debt Levels:
What to Look For | Explanation |
Debt-to-Equity Ratio | A manageable debt-to-equity ratio is crucial for assessing financial stability. |
Example: Techno Electric | |
Debt-to-Equity Ratio |
Inflation Hedge | Contracts usually increase with rising prices, so companies don’t lose money when costs go up. |
Diversified Exposure | You can put your money into different areas like electricity, roads, mobile networks, and more. |
Access For Small Investors | InvITs allow small investors to take part in large national projects. |
Growth Potential vs IT | Experts say IT has already grown a lot, while infrastructure still has more potential to increase. |
Tourism Sector Boost | Travel and weddings are helping hotels and airlines do better. |
4.41
0.79% |
-31.59% |
Ircon International Ltd. | 147.97B INR | 19.37 | 1.88% | -38.37% |
Rites Ltd. | 111.74B INR | 32.70 | 3.18% | -32.27% |
HFCL Ltd. | 117.22B INR | 31.96 | 0.25% | -17.03% |
Engineers India Ltd. | 103.63B INR | 25.03 | 1.62% | -22.43% |
Techno Electric & Engineering Company Ltd. | 127.57B INR | 33.45 | 0.64% | +7.64% |
NBCC (India) Ltd. | 262.42B INR | 52.42 | 0.65% | +2.83% |
KEC International Ltd. | 190.12B INR | 40.93 | 0.56% | -2.12% |
P/E Ratio |
Tells how much investors are willing to pay for ₹1 of the company’s earnings. |
Share Price ÷ Earnings Per Share (EPS) |
If share price = ₹200, EPS = ₹20, then P/E = 200 ÷ 20 = 10 |
Dividend Yield | Shows how much return you get from dividends compared to the share price. | (Annual Dividend ÷ Share Price) × 100 | If dividend = ₹2 and share price = ₹50, dividend yield = (2 ÷ 50) × 100 = 4% |
1-Year Return | Shows how much your investment has grown or dropped in one year. | (Gain ÷ Original Investment) × 100 | Priya invested ₹40,000, now it's ₹50,000. Gain = ₹10,000 → (10,000 ÷ 40,000) × 100 = 25% |
IRB borrows money for projects. Higher interest rates make loans more expensive, reducing profits and hurting earnings.
Inflation | Rising material costs (like cement) can increase expenses. If toll income doesn’t rise accordingly, IRB’s profits can decrease. |
Government and Political Factors |
Government Policies | Government road projects like Bharatmala help IRB, but payment delays or policy changes can reduce income. |
Political Stability | Local political issues can delay approvals, impacting project timelines and IRB’s earnings. |
Company-Specific Factors |
Project Portfolio | IRB has a strong list of projects, but delays or slower traffic growth can hurt earnings. |
Financial Health | Despite a low P/E ratio (4.38), the negative return (-28.25%) indicates market concerns over revenue, debt, or execution. |
Sector-Specific Risks |
Environmental and Social Risks (ESG) | Road projects face opposition on land use and pollution. Missteps in environmental or social concerns can cause delays and bad press. |
Operational Risks | Road projects are complex, and delays due to weather, land issues, or technical challenges can lead to higher costs. |
Funding Risks | Infrastructure projects require steady capital. If funding is reduced or delayed, projects may stall, negatively impacting IRB’s stock and performance. |
₹5,000 crore |
Renewable Energy | ₹4,500 crore |
Industrial Infrastructure | ₹5,500 crore |
Completion Timeline | These projects are expected to be completed over the next 3-5 years, providing a strong pipeline of future revenues. |
*T&C Apply
1.2 (The company has ₹1.20 of debt for every ₹1 of equity)
Total Debt | ₹2,400 crore |
Equity Capital | ₹2,000 crore |
Interest Coverage Ratio | 5.4 (The company earns 5.4 times more than its interest expenses, based on EBIT) |
Why It Matters | A strong interest coverage ratio shows the company can comfortably manage its debt obligations. |
3. Financial Health:
What to Look For | Explanation |
Financial Health | Positive revenue growth, cost control, and healthy cash flow are signs of a financially sound company. |
Example: Techno Electric | |
Annual Revenue (Last Fiscal Year) | ₹3,800 crore |
Revenue Growth (YoY) | 10% increase |
Net Profit | ₹250 crore |
Profit Margin | 6.6% |
Free Cash Flow (FCF) | ₹300 crore |
Debt Repayment from FCF | ₹150 crore |
Why It Matters | Strong revenue and profits with effective use of cash flow reflect financial strength and smart management. |
4. Management Quality:
What to Look For | Explanation |
Management Quality | Experienced and strategic leadership is key to successful project execution and long-term growth. |
Example: Techno Electric | |
Leader | Mr. Ramesh Kumar |
Experience | Over 35 years in the infrastructure and power sector |
Key Achievement | Completed a ₹1,500 crore transmission line project ahead of schedule |
Strategic Initiative | Expanded into renewable energy, adding ₹1,200 crore to annual revenues |
Why It Matters | A visionary and experienced leader can drive efficiency, innovation, and business expansion. |
The information below is sourced from an article in the Business Standard.
Here’s the example of Rising Roads Infra Ltd., an Indian company worth ₹9,500 crore.
But then, the rupee weakened:
This shows how currency risk can hurt companies that borrow in dollars but earn in rupees.
Infrastructure companies, especially those in renewable energy, often face higher risks because they:
Let’s say Rising Roads Infra already had ₹1,660 crore in dollar loans and plans to borrow another ₹500 crore next year to expand its solar park business. If the rupee keeps weakening, repaying these loans becomes even costlier.
Rising Roads Infra’s story highlights the deeper risks that are common in infrastructure stocks. These companies operate in complex, slow-moving sectors and face unique obstacles:
Risk | What It Means |
Market Fluctuations | Rising Roads’ stock dropped 12% when profits dipped—infra stocks can be volatile. |
Policy Changes | A delayed environmental approval added 6 months to one of its highway projects. |
Project Delays | Issues like land acquisition and permits stalled projects, affecting cash flow. |
High Upfront Costs | The company invested ₹4,000 crore before seeing any return, which is common in infra projects. |
Slow Economy | If GDP slows, the government cuts infrastructure spending, reducing new project opportunities. |
Big Project Risks | If one ₹1,000 crore project fails, it could significantly damage the company’s balance sheet. |
Too Much Debt | High debt means high interest payments, especially when foreign loans are involved. |
The information below is procured from the news articles of the Economic Times.
Example:
Take L&T (Larsen & Toubro), a major Indian infra player with a market cap of ₹4.5 lakh crore. In FY24, it secured new orders worth ₹2.6 lakh crore, up 20% YoY, driven by government-backed infra projects. With fresh infrastructure spending and rising demand, stocks like L&T could shine in 2025.
1. Demand Revival:
People, businesses, and the government are spending more. This boosts construction, factories, and the need for cement, steel, and oil.
2. Commodity Prices Rebounding:
After a dip, prices of cement, metals, and oil are rising again. This benefits companies that produce or use them.
3. Better Profits for Oil Companies:
Refining margins (profit from turning crude into fuel) are improving, lifting earnings.
4. Government Spending on the Rise:
Mihir Vora from TRUST Mutual Fund says government investment in railways, defence, and infrastructure will surge post-elections, giving a strong push to mid and small-cap infra stocks.
Factor | What It Means for 2025 |
Govt Spending | Boosts infra, railways, and defence |
Commodity Price Recovery | Helps metals, cement, and oil companies |
Demand Revival | Stronger construction and capex cycles |
Tech Infra Growth | Data centres, AI infra add fresh investment flows |
Mid & Smallcap Focus | Better growth than large caps, says Mihir Vora |
For example, NCC Ltd, a mid-cap infra company with a market cap of ₹10,000 crore. It has an order book of over ₹56,000 crore, covering roads, buildings, and water projects. Despite strong fundamentals, the stock trades 30% below its historical average valuation, making it attractive for long-term investors.
Investor Type | Why It Fits |
Long-Term Investors | Big projects = big rewards over 2–4 years |
Income Seekers | Many pay regular dividends from stable earnings |
Portfolio Diversifiers | Less volatile vs. tech or smallcaps |
Growth Believers | Infra = direct play on India’s development story |
Risk-Tolerant Planners | Some delays are possible, but solid returns for patient investors |
1. Government Boost:
The Indian government has increased its infrastructure spending massively, and roads, railways, and metro projects are in full swing.
2. Cheaper Loans:
Interest rates are expected to come down. That means lower borrowing costs for infrastructure firms, helping profits grow.
3. Low Valuations = Opportunity:
Many top infra stocks are still undervalued by 25–40%, offering a chance to buy quality companies at a discount.
4. Steady Income & Growth:
These firms earn from tolls, power, and contracts, often sharing profits via dividends.
5. Ideal for Long-Term Thinkers:
Infra projects take time. But patient investors can benefit as projects complete and cash flows kick in.
How To Invest In Infrastructure Stocks?
Open a DEMAT Account: Begin by opening a DEMAT account and associating it with your current bank account to simplify making transactions.
Sign In: Access your DEMAT account through a mobile app or a web interface.
Select a Stock: Select the stock in which you wish to invest.
Verify Funds: Confirm that you have sufficient funds in your bank account to purchase the shares you desire.
Buy the Stock: Take out your money and buy the stock at its quoted price, and specify how much you would like to buy.
Completion of Transaction: When a seller finds your offer acceptable, your transaction will be completed. Your bank account will be debited, and the shares will be credited to your DEMAT account.
Investing in infrastructure stocks can be a smart choice for long-term growth and stability. With the Indian government planning ₹10,00,000 crore in infrastructure spending, including ₹2,00,000 crore for highways and ₹75,000 crore for power projects, companies in this sector are set to benefit.
Infrastructure stocks provide consistent demand, protection against inflation, and regular income through dividends or InvITs. Despite challenges like delays and political risks, they offer strong growth potential with government support and increasing demand.
As India builds more infrastructure, it's a great time to think about adding these stocks to your investment. Whether you want reliable returns or growth, infrastructure stocks are a good opportunity for 2025 and beyond!
Q1: What does the future hold for infrastructure stocks in India?
Infrastructure stocks in India have strong long-term growth potential, driven by ongoing government investment in infrastructure development. They stand to benefit from India’s economic growth well into 2025 and beyond.
Q2: What are the strategies for investing in infrastructure?
Infrastructure investing offers various strategies based on risk and return, including investment-grade, high-yield, core, core-plus, value-add, and opportunistic approaches, allowing investors to choose based on their goals and risk tolerance.
Q3: Is infrastructure considered an alternative investment?
Yes, infrastructure is an alternative investment, often through direct project investments or infrastructure-focused private equity funds, diversifying portfolios outside traditional assets.
Q4: Why should you invest in infrastructure stocks?
Infrastructure stocks offer stable income and consistent returns, outperforming public equities and fixed income across different market conditions.
Q5: Which sectors are part of infrastructure in India?
In India, infrastructure includes sectors like power, telecom, roads and bridges, construction, oil and gas, ports, aviation, railways, urban infrastructure, and infrastructure finance, focusing on key decision-makers and financial managers.
