When you have stocks such as Adani Enterprises up by more than 100 per cent on YTD basis, Grasim up by more than 55 per cent, Container Corporation by 48 per cent, Adani Ports by more than 46 per cent and Tata Power up by more than 35 per cent on YTD basis one can sense that something lucrative, constructive and profitable is happening in the infrastructure space in India. The infrastructure sector is huge in India but has been performing poorly in terms of wealth creation for all those shareholders who betted on infrastructure players over the past decade. But that’s history.
Enter 2021 and you have the Nifty Infrastructure index generating more than double the returns generated by Nifty. Indeed, the infrastructure sector is in the limelight in 2021 and the momentum could just have begun for the sector that starved for investors’ money and confidence for years together. The table below highlights the infrastructure sector’s underperformance over the years and its outperformance in the recent month. The question is: Why are the infrastructure companies outperforming and what has changed in this space to the extent that the stocks are being re-rated and are trading with positive price momentum?
Broader Picture
This story is from the April 12, 2021 edition of Dalal Street Investment Journal.
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This story is from the April 12, 2021 edition of Dalal Street Investment Journal.
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