Budget 2022: PNC Infratech, GMR Infra, L&T, IRB Infra, NCC rise up to 8% as FM announces 'Gati Shakti' plan

Shares of infrastructure companies gained momentum on Dalal Street after finance minister Nirmala Sitharaman announced ‘Gati Shakti’ plan, a massive infrastructure development program to ease the movement of people and goods.

Delivering her fourth Budget speech in the Parliament today, the FM said that the government will expand the national highway network by 25,000 km in 2022-23, under the PM Gati Shakti master plan, to improve connectivity. The ₹100 lakh crore project will incorporate the infrastructure schemes of various ministries and state governments like Bharatmala, Sagarmala, inland waterways, dry/land ports, UDAN etc.

Following the announcement, shares of PNC Infratech gained as much as 7.75% to hit an intraday high ₹317.65. Among others, IRB Infrastructure Developers, KNR Constructions, NCC, GMR Infrastructure, Sadbhav Engineering, L&T, and NBCC (India), gained up to 4.5% on the BSE.

At the time of reporting, most of the infra stocks were trading lower than their respective intraday highs amid volatility in the broader market following the presentation of the Union Budget.

According to an industry expert, key beneficiaries are the transportation, logistics and road sector. The government plans to expand the road network by 25,000 km in 2022-23, while it proposes to build 100 new cargo terminals in the next 3 years and manufacture 400 new generation Vande Bharat trains.

“Setting capital expenditure target of ₹7.5 lakh crore, an increase of 35% vis-a-vis FY22 is a major shot in the arm for the Infrastructure sector and certainly much higher than market estimates. It is pertinent to note the reference towards investments into capacity building initiatives within the Infrastructure sector for much-needed skill upgradation pertaining to project appraisal, planning, design and project management including technical and knowledge assistance coming from multilateral funding agencies,” says Sandeep Upadhyay, managing director – infrastructure advisory, Centrum Capital.