+
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
    Technology

    Six ways a smarter workflow leads to faster, more accurate bids

    In today’s fast-paced civil construction environment, estimators need more than just solid numbers. They need smart, streamlined processes. This article explores six key ways connected workflows can transform the estimated approach, help in minimising risk, move faster, and improve accuracy. By integrating tools, data, and teams, one can produce stronger bids with less rework, fewer surprises, and more confidence. As an estimator, the job goes beyond producing numbers. They are responsible for delivering bids that are fast, accurate, and built to win. In today’s civil construction ind..

    Next Story
    Real Estate

    Experion Launches Women-Only Co-Living Project in Greater Noida

    Experion, part of Singapore-based AT Capital Group, has launched its first co-living space under its managed rental housing brand, VLIV, in Greater Noida. The all-women residence features 730 twin-sharing beds with a strong focus on safety, comfort, and well-being. VLIV has committed a $300 million investment to create a structured, service-led rental housing ecosystem in India. The brand aims to scale up to 20,000 beds in the next few years, with a long-term target of 100,000 beds nationwide. “India’s rental housing is fragmented. VLIV is our way of building long-term, dependabl..

    Next Story
    Infrastructure Urban

    Officine Maccaferri Acquires CPT to Bolster Tunnelling Tech

    Ambienta’s platform company, Officine Maccaferri S.p.A., has acquired CPT Group, a leading Italian developer of robotic prefabrication systems and digital control technologies for mechanised tunnelling. The move positions Maccaferri as a global player in integrated tunnelling solutions, blending traditional and advanced mechanised systems. Based in Nova Milanese, CPT serves major global contractors across Europe, Southeast Asia, and Australia. The company offers robotic prefabrication (Robofactory), productivity-monitoring software for Tunnel Boring Machines (TBMs), and eco-designed spa..

    Advertisement

    Subscribe to Our Newsletter

    Get daily newsletters around different themes from Construction world.

    STAY CONNECTED

    Advertisement

    Advertisement

    Advertisement

    Talk to us?