What are the key metrics to evaluating infra stocks in India?

The Indian Government right now is heavily investing in infrastructure projects across sectors like roads, railways, aviation, energy, healthcare & education system to facilitate economic growth. According to a report published by Mordor Intelligence, “The India Infrastructure Sector Market size is estimated at USD 223.59 billion in 2025, and is expected to reach USD 353.11 billion by 2030, at a CAGR of 9.57% during the forecast period (2025-2030)”.[1]

This huge increase in government investment in infrastructure projects has garnered investors' attention and interest in infra stocks. Investing in infra stocks not only provides steady cash flows but also long-term growth and stability. However, before investing in infra stocks, you need to consider several factors that influence or impact their growth potential.

In this article, we will examine key metrics that will help you evaluate the best infra stocks in India. But before that, let’s know about what infra stocks are and what the Government’s initiatives and plans are for promoting Infrastructure development and economic growth in India.

What Are Infrastructure Stocks?

Infrastructure stocks are shares of companies that are involved in the development and maintenance of facilities like roads, railways, highways, bridges, tunnels, airports, power plants, healthcare, etc., which are vital for the smooth function of the nation and its economic growth.

Government’s Initiatives Towards Infrastructure Development

The government is robustly taking steps towards infrastructure development, facilitating economic growth. Government programs like the National Infrastructure Pipeline (NIP), with a projected infrastructure investment of around ₹111 lakh crore (approximately USD 1.5 trillion) between FY2020 and FY2025, aim to improve infrastructure and drive economic growth.

The NIP program primarily focuses on various infrastructure sectors like energy, roads, and railways, leading to job creation and employment opportunities, eventually improving the quality of life.

Similarly, the Bharatmala Pariyojana project, launched in 2015, is aimed at expanding the road network by developing 34,800 km of highways. Other projects like Make In India and Aatmanirbhar Bharat are also aimed at facilitating investment and fostering economic growth.

Such infrastructure development projects are major growth drivers in the infrastructure sector in India. Therefore, making the infra stocks in India a good option for long-term investment.

Now, let’s have an overview of the factors that you should consider while evaluating the best infra stocks in India.

Key Metrics To Consider While Evaluating Infra Stocks In India?

Economic Growth

The economic growth of the country heavily impacts the infrastructure stocks. A decline in the economy can drastically influence the infrastructure projects of the company. The growing economy of India, considered the fastest in the world, is the major reason why it’s the right time to invest in infrastructure stocks in India. Therefore, analyzing or assessing the economic outlook of the country is essential before investing in the infra stock.

Order Book

A strong order book with a steady inflow of orders is a positive sign of the infra stock as it ensures the firm’s future revenue streams. However, along with the strong order inflow, you also need to analyze the firm’s project execution capabilities. Look at the firm’s past project execution history, and see if the company is capable of completing the project efficiently on time and within the budget.

Government Policies and Regulations

Changes in Government Policies and Regulations also heavily impact the infrastructure projects in India. Changes in the Government laws, policies, and regulations can lead to a delay in the project, which in turn impacts its profitability. Thus, before investing in an infrastructure project, you should consider evaluating the regulatory risks involved with it, as it can influence the stock performance.

Company Fundamentals

Assessing the company’s financial stability, including its profitability, debt levels, and revenue growth, is crucial to determine its stock performance. Along with the financial health and stability, you also need to analyze the fundamental ratios of the company. Ratios like Debt-to-Equity (D/E), Return on Capital Employed (ROCE), Return on Equity (ROE), Price to Earnings (P/E), Price to Book Value (P/BV), etc. Analyzing these ratios will give you valuable insights into the company’s financial health and future growth potential.

Political Stability

Infra stocks are cyclical in nature and their performance is highly influenced by economic downturns. During times of economic slowdown, the government reduces investment in infrastructure projects, and that adversely impacts the infrastructure companies. On the contrary, during times of economic booms, governments tend to spend more on infrastructure projects, benefiting the infrastructure companies and their stock performance.

Final Thoughts

Given India’s growing infrastructure sector and its importance in economic growth, investing in infra stocks offers you long-term growth potential. However, to gain higher returns, you need to invest in the right infrastructure stocks to secure your financial future. And, to evaluate the best infra stocks in India, you need to consider analyzing the above-mentioned metrics.

Investing in the right infrastructure stock can be a valuable addition to your investment portfolio. However, doing the extensive research and shortlisting the best infra stocks to invest can be overwhelming for you. This is where the role of Financial Advisory Services comes in. They are experts in the industry and provide you with valuable advice on how to manage your finances efficiently.

Sana Securities is one of the leading Financial Advisory Services in India, well-known for identifying profitable investment options for its clients. Be it bond investments or identifying the best-performing mutual funds, the firm is known for personalized and transparent services. Thus, we highly recommend getting connected with them to get valuable insights before investing in infrastructure stocks in India to secure your finances and maximize the growth potential of your investment.