Budget 2025: L&T, NCC, Other Road Construction Firms' Shares Fall As Capex Allocation Disappoints
The capex allotted this fiscal is 8.4% lesser than last year's allocation.
Shares of Larsen & Toubro Ltd., IRB Infrastructure Developers Ltd., Ashoka Buildcon Ltd., PNC Infratech Ltd., Dilip Buildcon Ltd. and NCC Ltd. slid on Saturday after Finance Minister Nirmala Sitharaman announced Rs 10.2 lakh crore towards capital expenditure in Union Budget 2025–26. This marks an 8.4% decrease from last year's allocation of Rs 11.1 lakh crore.
While the focus on capex continues, the government has been increasing the capex target at a slower pace, given the medium-term fiscal consolidation path of the central government.
The Economic Survey, released ahead of the Budget, highlighted a sustained rise in capital expenditure on infrastructure, with a trend growth rate of 38.8% from fiscal 2020 to fiscal 2024. Roads were among the top-performing sectors, benefiting from the government’s increased allocation.
The survey also noted that the National Monetisation Pipeline saw Rs 3.86 lakh crore in private investments under core asset monetisation, with roads leading the participation.
Despite these efforts, the survey pointed to an unmet demand for infrastructure development and emphasised the need for stronger public-private partnerships to bridge the investment gap.
The previous budget had earmarked a capital expenditure outlay of Rs 11.1 lakh crore, accounting for 3.4% of the GDP. Additionally, the government extended Rs 1.5 lakh crore in long-term, interest-free loans to states to support resource allocation.
To attract private investment in infrastructure, the government took measures including viability gap funding, enabling policies, and a market-based financing framework.
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Stock Movements
L&T shares fell 4.64% to Rs 3,402.00 before trading at Rs 3,426.20, down 3.96% at 1:12 p.m. It has fallen 1.85% in the last year.
Ashoka Buildcon's stock fell 1.73% to Rs 253.35 before trading at Rs 255.05, down 1.07% at 1:12 p.m. It has risen 40.21% in the last year.
PNC Infratech fell 3.13% to Rs 309 before easing to Rs 309.35, down 3.03% as of 1:12 p.m. The stock has fallen 32.45% over 12 months.
Other Stocks in Focus (as of 1:12 p.m.)
IRB Infrastructure Developers: Down 3.04% at Rs 55.58.
Dilip Buildcon: Down 3.77% at Rs 418.20.
NCC: Down 7.27% at Rs 233.95.
HG Infra Engineering: Down 0.33% at Rs 1,276.65.
Afcons Infrastructure: Down 0.87% at Rs 468.05.
