+
Why Indian infrastructure companies do not enjoy good valuation?
ECONOMY & POLICY

Why Indian infrastructure companies do not enjoy good valuation?

Indian infrastructure sector has been a key driver for the Indian economy. The sector is highly responsible for propelling India’s overall development and enjoys consistent focus from the Government as well. Rather it is one sector with highest capital gearing. This in simple terms means a Rupee one Invested in infrastructure generates opportunities worth Rs 10. It is a known fact that despite witnessing a good growth on the GDP front, India has been an infrastructure deficit country. Indian Government has always tried its best to provide its support to the sector with different sops and incentives. However despite all such factors, the performance of infrastructure companies on the bourses depicts a different story. If we take a long term view, while the Indian benchmark indices have touched a new peak after witnessing a meltdown in 2008, the infrastructure companies have not been able to cross the historical highs they had posted during the bull phase they witnessed during 2004-2008. While the other sectors like steel, cement and even the other building material companies have managed to cross their respective historical high levels. However the infrastructure sector – that basically drives the demand for the above sectors has not been Able to witness a revival. There were a few tranches where the infrastructure companies witnessed some marginal up move, however the performance over the past decade has been below par. While a few of the companies are still providing negative returns in the past one decade, few of the infrastructure also got delisted.

Forget about the smaller companies that have actually eroded the wealth of the investors, the biggies like L&T have also provided just 6 per cent CAGR for the past one decade, marginally higher than the risk free returns. If such are returns for the posted boy of the Indian infrastructure sector – one can just imagine what kind of returns other smaller companies have provided.

What is the reason behind such a poor performance of infrastructure companies on the bourses? CW analyses in detail.

Click here to know more…

Also read:

  • Why investors are wary of investing in Real Estate companies?
  • Govt wants to allow firms to invest in EL projects 
  • Fastest growing construction companies in India 2020: CW Survey 

  • Image courtesy 

    Indian infrastructure sector has been a key driver for the Indian economy. The sector is highly responsible for propelling India’s overall development and enjoys consistent focus from the Government as well. Rather it is one sector with highest capital gearing. This in simple terms means a Rupee one Invested in infrastructure generates opportunities worth Rs 10. It is a known fact that despite witnessing a good growth on the GDP front, India has been an infrastructure deficit country. Indian Government has always tried its best to provide its support to the sector with different sops and incentives. However despite all such factors, the performance of infrastructure companies on the bourses depicts a different story. If we take a long term view, while the Indian benchmark indices have touched a new peak after witnessing a meltdown in 2008, the infrastructure companies have not been able to cross the historical highs they had posted during the bull phase they witnessed during 2004-2008. While the other sectors like steel, cement and even the other building material companies have managed to cross their respective historical high levels. However the infrastructure sector – that basically drives the demand for the above sectors has not been Able to witness a revival. There were a few tranches where the infrastructure companies witnessed some marginal up move, however the performance over the past decade has been below par. While a few of the companies are still providing negative returns in the past one decade, few of the infrastructure also got delisted. Forget about the smaller companies that have actually eroded the wealth of the investors, the biggies like L&T have also provided just 6 per cent CAGR for the past one decade, marginally higher than the risk free returns. If such are returns for the posted boy of the Indian infrastructure sector – one can just imagine what kind of returns other smaller companies have provided. What is the reason behind such a poor performance of infrastructure companies on the bourses? CW analyses in detail.Click here to know more… Also read: Why investors are wary of investing in Real Estate companies? Govt wants to allow firms to invest in EL projects  Fastest growing construction companies in India 2020: CW Survey  Image courtesy 

    Next Story
    Real Estate

    Heena Lalwani Buys Rs 1.13 Billion Juhu Apartment

    Heena Lalwani, promoter of Aatman Innovations Private Limited, has purchased a luxury apartment worth Rs 1.13 billion in Mumbai’s upscale Juhu locality, according to property registration documents accessed by Zapkey.com.The 9,862 sq ft apartment, located on the 10th floor of Lodha Developers’ Avalon Tower, was acquired at Rs 115,000 per sq ft and comes with five car parking spaces. The deal, registered on 18 August 2025, also included the payment of Rs 68 million in stamp duty and a Rs 30,000 registration fee.Lodha Developers did not respond to queries regarding the transaction, while the..

    Next Story
    Real Estate

    Godrej Buys KPHB Land for Rs 7 Billion in E-Auction

    An acre of prime land in Kukatpally Housing Board (KPHB), Hyderabad, was auctioned for Rs 7 billion, with the Telangana Housing Board generating Rs 5.47 billion from the sale of 7.8 acres through e-auction on 20 August 2025.The auction notification was issued last month, attracting bids from Godrej Properties, Aurobindo Realty, Prestige Estates, and Ashoka Builders, according to Board vice-chairman V.P. Gautham. With an offset price of Rs 4 billion per acre, the three-hour auction saw 46 bid increases, before Godrej Properties acquired the land.Revenue generated from the auction will be utilis..

    Next Story
    Real Estate

    HMDA to Auction 93 Prime Plots in September

    The Hyderabad Metropolitan Development Authority (HMDA) is preparing to conduct a three-day auction of prime open plots across Hyderabad, Rangareddy, and Medchal-Malkajgiri districts this September.According to official reports, the e-auction will take place on 17, 18, and 19 September, offering 93 plots. Of these, 70 are located in the Bachupally HMDA layout, with the remainder spread across Turkayamjal, Kokapet, Poppalguda, Chandanagar, Bairagiguda, Gandi Maisamma, Suraram, Medipally, and Bachupally village.The highest upset price has been fixed at Rs 175,000 per square yard for a land parce..

    Advertisement

    Subscribe to Our Newsletter

    Get daily newsletters around different themes from Construction world.

    STAY CONNECTED

    Advertisement

    Advertisement

    Advertisement

    Talk to us?