Bullish on IVRCL and IRB Infra: Gaurang Shah, Geojit BNP Paribas Financial Services

Gaurang Shah, Asst. VP, Geojit BNP Paribas Financial Services, in a chat with ET Now talks about infrastructure stocks.

You are bullish on two infra stocks that is IVRCL and IRB Infra. Is there any particular reason you like this sector?

With the kind of focus that you are going to see going forward in the infrastructure space - both rural and agri - and the government spend on the infrastructure, we feel that most of these midcap infrastructure stocks, other than the likes of old hats like the HCC and the Nagarjuna, would definitely tend to outperform. The kind of ability for them to execute the orders in time and thereby get incentives from various state governments is pretty high.

Order book stands very high for both the companies and incidentally IRB Infra is one of the preferred companies as far as certain state go for their infrastructure development. Given the fact that the margins are close to around about 10% going forward, I think that could only get improved with increased order book. Most of these infrastructure companies - both inclusive IVRCL and IRB Infra - have their own assets. So from that point of view there is a little bit heavy weightage on the infrastructure space and that’s why we like IVRCL and IRB Infra.