Best Infrastructure Stocks In India In January 2025: IRB Infrastructure, Praj Industries and More – 5-Year CAGR Basis

Infrastructure development is essential to achieving India’s goal of becoming a $5 trillion economy by 2025. To boost the sector’s growth, the government has introduced the National Infrastructure Pipeline (NIP), along with initiatives like ‘Make in India’ and the Production-Linked Incentive (PLI) scheme. Over 80% of infrastructure spending has historically been directed towards transportation, electricity, water, and irrigation.

As India’s environment and demographics change, the government also focuses on other areas to improve infrastructure. There is a growing need for better delivery of housing, water, sanitation, digital services, and transportation, which will support economic growth, enhance quality of life, and improve competitiveness.

In this article, you will learn about the best infrastructure stocks in India in January 2025 based on 5-year CAGR.

Best Infrastructure Stocks in January 2025 – 5-Year Cagr Basis

Note: The best infrastructure stocks list is selected from the Nifty 500 universe and sorted based on a 5-year CAGR as of January 02, 2025.

Overview of Top Infrastructure Stocks in India

1. IRB Infrastructure Developers Ltd

IRB Infrastructure Developers Ltd is a prominent company in India that focuses on infrastructure development and construction. They are especially skilled in building and maintaining roads and highways. The company also works on airport development and real estate projects, showcasing its versatility in the infrastructure industry.

For the quarter ended September 2024, the company reported a revenue of ₹993.75 crore and a net profit of ₹159.89 crore. In comparison, the revenue for June 2024 stood at ₹1,254.41 crore, with a net profit of ₹141.84 crore.

Key metrics: 

• Earning per share (EPS): ₹1.37
• Return on equity (ROE):8.46%

2. Praj Industries Ltd

Founded in 1983, Praj Industries Ltd is a leading biotechnology and engineering company with a worldwide presence. It offers environmentally friendly solutions in bioenergy, water purification, process equipment, breweries, and wastewater treatment. The company focuses on technologies related to the environment, energy, and farm-to-fuel. Praj has offices in Thailand, the Philippines, and the USA.

In the quarter ending September 2024, Praj Industries Ltd reported a revenue of ₹703.51 crore and a net profit of ₹57.88 crore. This is compared to ₹600.66 crore in revenue and ₹91.84 crore in net profit in the previous quarter (June 2024). 

Key metrics: 

• EPS: ₹16.15
• ROE: 22.88%

3. Ircon International Limited

Ircon International Limited (IRCON) was founded in 1976 as a company focused on railway construction. Since 1985, it has grown and now operates as a state-owned engineering and construction firm. IRCON manages large and complex infrastructure projects in sectors such as railways and highways.

In the quarter ending September 2024, the company reported a revenue of ₹2,298.86 crore and a net profit of ₹202.22 crore. This is compared to ₹2,180.48 crore in revenue and ₹176.51 crore in net profit in the previous quarter (June 2024). 

Key metrics: 

• EPS: ₹9.03
• ROE: 14.09%

4. NCC Limited

NCC Limited, founded in 1978, handles turnkey EPC contracts and BOT projects through Public-Private Partnerships. The company specialises in building roads, buildings, irrigation systems, water and environmental projects, electrical works, metals, mining, and railways.

In the quarter ending September 2024, the company reported a revenue of ₹4,444.98 crore and a net profit of ₹160.55 crore. This is compared to ₹4,713.28 crore in revenue and ₹200.74 crore in net profit in the previous quarter (June 2024). 

Key metrics: 

• EPS: ₹12.13
• ROE: 10.83%

5. NBCC (India) Limited

NBCC (India) Limited is a top government-owned company under the Ministry of Housing and Urban Affairs. It works in three main areas: Project Management Consultancy, Engineering Procurement & Construction, and Real Estate.

In the quarter ended September 2024, NBCC (India) Limited reported a revenue of ₹1,864.90 crore and a net profit of ₹123.70 crore. In comparison, the revenue for June 2024 was ₹1,627.34 crore, with a net profit of ₹86.63 crore. 

Key metrics: 

• EPS: ₹1.50
• ROE: 18.18%

Key Considerations Before Investing in Infrastructure Stocks

1. Market Demand: Growing economies and increasing urbanisation drive demand for infrastructure development.
2. Government Policies: Understand regulations and monitor government spending on infrastructure, as it impacts stock performance.
3. Company Fundamentals: Review the company’s financial stability, profitability, debt levels, and growth potential from current and future projects.
4. Sector Risks: Political stability and economic cycles can affect infrastructure projects and investments.
5. Competitive Position: Assess the company’s market position, competitive advantages, and innovation in infrastructure technologies.
6. Long-Term Investment: Infrastructure stocks typically require a long-term investment horizon; consider the potential for steady dividend yields.

The Future of India’s Infrastructure: Growing Investment and Opportunities

India’s infrastructure sector is seeing a significant rise in capital expenditure (capex), which has increased by 37% in the current fiscal year. This growth supports India’s goal to become a US$ 5 trillion economy by 2027. The government is focusing on key areas such as roads, shipping, and railways, which will help attract private investments and improve rural employment and consumption.

India needs to invest US$ 840 billion in urban infrastructure to meet its fast-growing population’s demands over the next 15 years. Focusing on long-term maintenance and the strength of structures like bridges and airports is essential to ensure the sustainability of these investments.

The rise of digitalisation and the opportunities in Tier II and III cities are helping blur the gap between metros and non-metros. Commercial real estate and residential sales are seeing an uptick, and the government’s “Vision 2040” plan aims for 190-200 operational airports by 2040. These factors highlight a bright future for India’s infrastructure sector, with rapid growth and development ahead.

Conclusion

Infrastructure stocks play a vital role in driving India’s growth, making them increasingly attractive to investors. Choosing the right infrastructure stocks can lead to good returns in the long run. However, it’s important to research a company’s financial health, think about your investment timeline, and understand the sector’s growth prospects before making any investment decisions.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.