As India’s GDP growth rate rebounded to 6.3% from a three-year low of 5.7%, growth acceleration is going to be key in the coming year 2018. Over the last few years, India has improved its fiscal positions from a fiscal deficit of 4.9% to 3.5% as a percentage of GDP. From the financial year 2010 to 2014, the average capital expenditure of government was 50-50% on economic services like road, railways and social services like education and health. But since after Narendra Modi government had been in power till now, from FY 2015 to FY 2017, road, railways and housing form a major part of government capital expenditure at nearly 88%.
The higher expenditure on infrastructure can lead to stronger growth prospects, Edelweiss said in a report. Real Estate sector is on verge of revival with housing & real estate currently contribute ~7% to GDP is expected to jump to ~10% by 2025, according to Edelweiss. With government’s increased capital expenditure on infrastructure, we bring to you four stocks which you may buy to ride on Modi’s infrastructure wave.
Shares of Asian Granito India have more than doubled in the last 12-month period. The stock of Asian Granito India rose as much as 136% to Rs 530 from a level of Rs 224 a year ago. The research and brokerage firm Edelweiss has given a ‘buy’ rating with a target price of Rs 640 from a current market price of Rs 516 which implies an upside of 24%.
Shares of Century Plyboards have also more than doubled investors wealth in the last one year. The stock of Century Plyboards jumped 110% to a level of Rs 336 from Rs 160. Edelweiss has initiated coverage on the stock and has given a ‘buy’ rating with a target price of Rs 390 from its current market price of Rs 335 which implies an upside of 16%.
Shares of Everest Industries have nearly tripled in the last one year. The stock of Everest Industries has jumped 200% to Rs 578 from a level of Rs 193 a year earlier. Edelweiss has given a ‘buy’ rating to the stock with a target price of Rs 624 from its current market price of Rs 531, implying an upside of 18%.
Shares of Birla Corporation have nearly doubled in last 12 months, returning about 85% to Rs 1,163 from a level of Rs 624 a year ago. Edelweiss has given a ‘buy’ rating with a target price of Rs 1,300 from a current market price of Rs 1,124, implying an upside of 16%.