The road not ahead

The macro headwind may be getting worse for the infra sector, but a handful of companies with robust order book could just weather the dust storm


The present government has been long on promises and short on delivery. That, though, hasn’t stopped it from making new commitments. The Finance Minister recently reiterated that Rs.100 trillion would be invested in infrastructure. How and to what extent that promise will be fulfilled is anyone’s guess, but recent developments have not been encouraging. Take, for instance, what Minister of Road Transport and Highways Nitin Gadkari said at a recent conference in the capital. “One thing is clear that the government is facing financial constraints and it is very difficult for any government to invest in all these sectors (infrastructure),” he said. Gadkari admitted that they are finding it difficult to fund these projects, while urging private companies to boost investment and help revive economic growth. Reflecting this bleak sentiment, road stocks such as Ashoka Buildcon, Dilip Buildcon and KNR Constructions have fallen by 20-30% in the past six months. So, what’s ailing our infra sector? Is it just collateral damage from an economic slowdown, or is there much more at play?