3 stocks that Yes Securities is betting on amid govt's infra push

Following NHAI’s plans of tightening the bidding criteria and bid pipeline of 16,284 kms, Yes Securities expects organized players to bag healthy orders in FY23.

"The government’s strong infra push by NIP, GATI Shakti and Budget 2022-23, rising toll prices, most infra companies having robust order book and healthy bid pipeline are expected to witness a strong profitability with improved return ratios," it added.

"With huge projects coming under roadways, including metro projects and irrigation & water infra projects, these sectors are likely to witness good traction in awarding activity along with building quality infrastructure," the brokerage firm pointed out.

Yes Securities continues to prefer companies with a strong balance sheet, low debt levels, good corporate governance, well-managed working capital cycle and high book-to-bill ratio which provides robust revenue visibility over the next 2-3 years. GR Infra Engineering, KNR Construction, and HG Infra Engineering are among its top bets.

For GR Infra Engineering, the brokerage house pointed out that an in-house integrated model of design and engineering team and owned construction equipment base will give it a competitive edge over its peers. Robust order inflows will lead to comfortable order book-to-sales, it added.

Likewise, KNR Construction will benefit from a robust order book, strong beneficiary from the ongoing uptick in the infra sector, and focus on monetizing HAM assets thereby strengthening the balance sheet, the brokerage observed.

Yes Securities is also bullish on HG Infra Engineering. It said robust order inflows will lead to comfortable order book-to-sales, adding that the company has a lean balance sheet despite exposure to the HAM portfolio.

Shares of HG Infra Engineering have fallen more than 36 per cent from their October 2021 highs, amid broader market weakness, putting the stock in the bear grip.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)