Tailwinds get stronger due fiscal discipline; 5 construction & contracting companies having upside potential of up to 30%

While it was an interim budget, on one count it gave more indications even than a full budget. That count is the path which interest rates may follow. If one goes by the reaction of the debt market and the benchmark G-sec yield, the probability of interest rates coming down has increased very sharply. In an economy like India, where cost of capital matters more than anything else, many sectors will see positive impact. But the strongest correlation is with banks, real estate, construction and infrastructure. Among these we take a look at construction and contracting companies as lower interest rates means more tailwinds to the existing one of higher demand. Not only does the overall demand have a correlation with interest rates but even their own operating matrix is such that lower interest rates benefit them. ET screener powered by Refinitiv’s Stock Report Plus lists down infrastructure stocks with high upside potential over the next 12 months, having an average recommendation rating of buy/strong buy/hold.