Infra space to benefit in coming days; to report high numbers: BP Singh, Pramerica Mutual Fund

In a chat with ET Now, BP Singh, Executive Director & CIO-Equities at Pramerica Mutual Fund, shares his thoughts on the infra space. Excerpts:

ET Now: What are your thoughts on some of these construction and infrastructure plays? What is the sense that are you getting about this entire sector?

BP Singh: This is one sector which is going to benefit immensely in the coming days. Infrastructure will result in a huge amount of investments, but what actually plays a significant role is that out of 100 corporates who were actually bidding for orders in the year 2008 and 2009, not more than five or six are left to bid now. Most of the others are struggling with a huge order book. That is where they are stuck with the leverages and they are now actually vacating it.

Remaining new orders are going to be bid by a few companies, where the margins are going to be significantly higher. Simultaneously, we are seeing that the commodity prices - which are actually going to be the raw material for these companies - are coming down.

If we combine both these facts together, we see that these companies are going to report significantly higher numbers and the valuations are in our favour.