MUMBAI: The ruling party’s win in Uttar Pradesh will likely benefit the stocks of infrastructure firms, as the new government makes good its development promises and stalled projects revive on prospects of better cooperation between the Centre and the state.
“The implementation of infrastructure projects and the order flow would be seamless. As a result, VA Tech Wabag may see good order inflow for the Ganga cleaning project,“ said Akash Jain, VP research at Ajcon Global Services.
When the BJP government came to power at the Centre in 2014, Namami Gange was its flagship project and stocks of companies engaged in water treatment, such as VA Tech Wabag and Ion Exchange India, were expected to be key beneficiaries. Now, VA Tech may see up to a five-times increase in its order book, prompting a re-rating in the stock. It closed 2.9% higher on Tuesday . According to the BJP manifesto, a Gareeb Kalyan card would give people `6 l a k h i n h o u s i n g l o a n s, a n d t h e r e would be toilets in every household.
Besides, 25 new medi cal colleges and super-specialty hospitals are to be created.
“With the BJP coming to power, development-related projects could see a push of up to 40% as the needed financial strength for faster execution is perceived to be there,“ said AK Prabhakar, head of research at IDBI Capital.
NBCC is expected to be a key beneficiary of these initiatives as it could secure orders for re-development colonies, hospitals, and educational institutions, waste-disposal and water management systems. The stock rose 4.42% on Tuesday. Stock of IL&FS Transportation Networks would also benefit in the coming months, said analysts, as the company could see faster execution in its current order book of road networks: The company is also likely to win new orders.
Sintex Industries, which manufactures plastic products, is also expected to win new orders in the affordable housing segment. The stock gained 2.3% on Tuesday .
“The company’s pre-fabricated structures, which are used for lowcost housing, is one area where the company could secure new orders,“ Ajcon’s Jain said.