IRB Infra and IL&FS Transnet two preferred picks in the infrastructure: Gaurang Shah, Geojit BNP Paribas Financial Services

In a chat with ET Now, Gaurang Shah, Asst VP of Geojit BNP Paribas Financial Services, shares his thoughts on the infrastructure sector. Excerpts:

ET Now: Given all the talk about the push on roll projects and infrastructure focus, are you also recommending IRB Infra?

Gaurang Shah: As a disclosure, we do have two positive coverage in the infrastructure space - one of them is IRB Infra and other one is IL&FS Transnet. Though it was a difficult time for the infrastructure companies in terms of working capital for the execution, getting further orders and some of that order book execution is virtually stalemate. Thus, our earlier targets six-eight months back was about 265 to 285, but now with this new government in place, we have a near-term target of about 245 to 260. If there is some pleasant surprise in the budget for the infrastructure pack, then these are the two companies which have excellent execution capability. Debt on the balance sheet is very negligible. Working capital is not a big problem and IRB Infra about a week or a fortnight back got a huge order from NHAI from Haryana, close to about 1200 or 1300 crores. Hence, there is a chance for this company to again get back to those days which it was a couple of years back. I would say IRB Infra and IL&FS Transnet are the two preferred picks in the infrastructure pack.