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Budget 2010-11: Construction


India is on the verge of witnessing a sustained growth in infrastructure buildup. With a slew of announcements in housing, road, port and airport development, we are seemingly on a path of sustained recovery in infrastructure construction in the country. As infrastructure plays a vital role in the Indian economy, many experts believe that in order to go to a double digit growth path in the future, investments in the infrastructure sector should be increased. Given Rs 1,735 bn earmarked for the infrastructure development in FY 2011, we believe this a step in the right direction.

Income of the companies engaged in infrastructure development was exempt from tax under section 80-IA for 10 consecutive years which is about to expire in March 2010. Although non-extension of this tax holiday for another term proved to be a dampener, we are excited about the road map laid down for the sector as a whole from an economic standpoint.

 Budget Measures
  		• Government earmarks Rs 1,735 bn for infrastructure development
  		•  Road development expenditure allocation increased to Rs 198 bn
  		•  Target to build 20 km of highway each day
  		•  IIFCL to double refinancing to banks lending to infrastructure companies
  		•  Approximately Rs 661 bn allocated for rural development
  		•  Interest rate subsidy for affordable housing extended till FY 2011
  		•  Developers allowed to complete housing projects in 5 years (extended by a year) to avail tax breaks
  		•  Additional tax relief of Rs 20,000 for investing in infrastructure bonds over and above the total investible limit of Rs 1 lac pa
  		•  Allocation towards development of urban infrastructure stands at Rs 35 bn

     Budget Impact
  		• Increase in refinancing from IIFCL will encourage banks to lend to infrastructure companies boosting overall growth in the sector
  		•  Increased allocation towards road infrastructure development will better the existing transportation mechanism
  		•  Extension of interest rate subsidy will boost the demand for affordable housing
  		•  Providing additional tax relief for investment in infrastructure bonds will further encourage retail participation in the sector

     Company Impact
  		• Extension of interest rate subsidy to benefit companies like Parsvnath and HDIL as they cater to low income housing group
  		•  IRB Infra and IVRCL Infra to be directly benefitted as a result of increasing thrust on road infrastructure development

    Budget Impact: Construction Sector Analysis for 2009  | Construction Sector Analysis for 2011
    Latest: Performance Of Construction Stocks | Construction Sector Report



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    Sector Performance
    COMPANY PRICE (Rs)
    ABHINAV CAP 117.8
    (-3.2%)
    ADHBHUT INFRA 12.4
    (-9.5%)
    AGI INFRA 292.6
    (-6.0%)
    AHLUWALIA CONTRACTS 670.0
    (-7.8%)
    AJMERA REALTY 102.0
    (-5.7%)
    AJR INFRA & TOLLING 0.7
    (3.0%)
    ALPINE HSG. 88.3
    (0.3%)
    ANSAL BUILD. 85.6
    (-13.2%)
    ANSAL HOUSING 6.2
    (-13.1%)
    ANSAL PROPERTIES 3.2
    (-1.5%)
    ARIHANT SUPER 202.3
    (-4.9%)
    ARKADE DEVELOPERS LTD. 100.5
    (-2.5%)
    ARSS INFRASTRUCTURE 54.8
    (5.0%)
    ARVIND SMARTSPACES 507.6
    (-4.9%)
    ASHIANA HOUSING 294.6
    (-2.3%)
    ASHOKA BUILDCON 106.0
    (-6.8%)
    ATHENA CONST. 3.5
    (-14.2%)
    ATLANTA 34.7
    (-5.0%)
    BCPL RAILWAY INFRASTRUCTURE 57.0
    (-3.2%)
    BDR BUILDCON LTD. 0.0
    (0.0%)
    BHAGYANAGAR PROPERTIES 42.0
    (0.0%)
    BHANDERI INFRA 140.0
    (-3.5%)
    BIGBLOC CONSTRUCTION 46.0
    (-8.2%)
    BL KASHYAP & SONS 46.3
    (-6.2%)
    BRIGADE ENTERPRISES 634.3
    (-1.4%)
    BRIGHT REAL ESTATE 944.0
    (1.0%)
    BSEL INFRASTRUCTURE 4.1
    (-4.0%)
    CAPACITE INFRAPROJECTS 211.1
    (-5.6%)
    CEETA INDUST. 43.0
    (-1.2%)
    CEMINDIA PROJECTS LTD 510.1
    (-5.6%)
    CHAVDA INFRA LTD. 88.1
    (-8.2%)
    CITADEL REALTY AND DEVELOPERS 36.9
    (-6.5%)
    CONSOLIDATED CONST. 14.6
    (-2.6%)
    CONTINENTAL CONTROL 10.0
    (4.6%)
    COROMANDEL ENG. 85.6
    (5.0%)
    COUNTRY CONDOS 4.0
    (-4.8%)
    CRANE INFRA. 10.6
    (-11.5%)
    DECOROUS INVESTMENT & TRADING CO LTD. 14.0
    (-5.0%)
    DEEPAK BUILDERS & ENGINEERS INDIA LTD. 66.6
    (-10.9%)
    DEVOTED CONSTRUCTION 4.3
    (-4.9%)
    DHANUKA INFRA REALTY LTD. 9.8
    (4.8%)
    DHANUKA REALTY 9.8
    (4.8%)
    DHRUV ESTATES 11.8
    (-5.0%)
    DILIP BUILDCON 392.0
    (-4.7%)
    DIVYASHAKTI GRAN 48.2
    (-0.1%)
    DLF 515.0
    (-4.8%)
    DUGAR HOUSING DEVELOPMENTS LTD. 357.3
    (-1.0%)
    EAST BUILDTECH 41.5
    (-1.5%)
    ELDECO HOUS. 771.0
    (-2.2%)
    EMAMI REALTY 52.3
    (-13.2%)
    EMBASSY DEVELOPMENTS 45.7
    (-5.0%)
    ETT. 0.9
    (-2.2%)
    FRANKLIN INDUSTRIES 0.4
    (2.7%)
    GALLOPS ENTERPRISE 26.0
    (0.0%)
    GARUDA CONSTRUCTION & ENGINEERING LTD. 152.0
    (-5.0%)
    GENERIC ENGINEERING 43.0
    (-0.3%)
    GODREJ PROPERTIES 1,500.7
    (-3.3%)
    GPT INFRA 100.1
    (-3.6%)
    GROVY INDIA 35.1
    (-3.0%)
    GTL INFRA 1.0
    (-2.9%)
    GUJARAT PIPAVAV PORT 144.4
    (-5.0%)
    GYAN DEVELOPERS 36.7
    (0.5%)
    HCC 14.2
    (-7.8%)
    HDIL 2.0
    (-4.7%)
    HEC INFRA PROJECTS 102.1
    (-5.0%)
    HEMISPHERE PROPERTIES 127.0
    (-7.3%)
    HILIKS TECH 41.9
    (-9.9%)
    HOMESFY REALTY LTD. 128.0
    (-0.2%)
    HUBTOWN 185.8
    (-5.9%)
    IL&FS ENGINEERING 23.8
    (-5.0%)
    INANI MARBLE 9.3
    (-2.1%)
    INTERNATIONAL CONSTRUCTIONS 98.2
    (5.0%)
    IRB INFRA 40.1
    (-3.5%)
    IRB INVIT FUND 58.3
    (0.4%)
    ISHAAN INFRASTRUCTURES AND SHELTERS 8.2
    (1.5%)
    J KUMAR INFRA 477.4
    (-1.9%)
    JAIPRAKASH ASSO 2.4
    (-4.7%)
    JOY REALTY 614.5
    (-1.0%)
    JTL INFRA 49.0
    (-6.0%)
    JUPITER WAGONS 255.0
    (-3.0%)
    KALPATARU LTD. 283.4
    (-4.3%)
    KAMANWALA IN 16.0
    (-1.8%)
    KARDA CONSTRUCTIONS 0.2
    (0.0%)
    KAUSHALYA INFR. DEV. 825.9
    (6.4%)
    KCL INFRA PROJECTS 1.3
    (-3.8%)
    KESAR INDIA 1,168.9
    (1.1%)
    KEYSTONE REALTORS 370.0
    (-0.7%)
    KINGS INFRA 103.3
    (-3.8%)
    KMF BUILDERS 6.7
    (0.0%)
    KNR CONSTRUCTIONS 114.3
    (-3.2%)
    KOLTE PATIL 328.0
    (0.7%)
    KRETTO SYSCON 0.6
    (-4.7%)
    LANCOR HOLDINGS 20.8
    (1.4%)
    LANDMARK PROPERTY 6.2
    (1.8%)
    MACROTECH DEVELOPERS 730.0
    (-8.4%)
    MADHAV INFRA PROJECTS 7.4
    (-6.6%)
    MADHAV MARBLE 32.0
    (-5.1%)
    MADHUCON PROJECTS 3.9
    (-4.2%)
    MAHENDRA REALTORS & INFRASTRUCTURE LTD. 38.0
    (-4.4%)
    MAHESH DEVELOPERS 12.3
    (5.0%)
    MAHINDRA LIFESPACE 326.2
    (-4.5%)
    MAN INFRACONST. 85.5
    (-5.9%)
    MANAS PROPERTIES 390.0
    (0.4%)
    MANAV INFRA PROJECTS 40.0
    (0.0%)
    MANJEERA CONSTRUCTIONS 36.0
    (0.0%)
    MARATHON NEXTGEN 401.4
    (-4.0%)
    MASON INFRATECH LTD. 128.5
    (-8.9%)
    MAX ESTATES LTD. 336.7
    (-8.7%)
    MAXHEIGHTS INFRA 12.8
    (2.2%)
    MBL INFRASTRUCTURES 20.3
    (-7.3%)
    MCON RASAYAN 40.0
    (-3.6%)
    MEGA NIRMAN AND INDUSTRIES 38.2
    (-5.0%)
    MODIS NAVNIRMAN LTD. 295.0
    (-7.2%)
    NATIONAL STANDARD (INDIA) 1,350.0
    (-4.2%)
    NBCC (INDIA) 79.1
    (-5.7%)
    NCC 131.5
    (-6.6%)
    NESCO 1,017.7
    (-3.5%)
    NIDHI GRANITES 239.6
    (-10.0%)
    NILA INFRA. 6.8
    (-5.1%)
    NILA SPACES 12.0
    (-4.5%)
    NIRAJ CEMENT 24.1
    (-6.9%)
    NITESH ESTATES 3.1
    (-5.8%)
    NOIDA TOLL BRIDGE 3.2
    (-7.0%)
    OBEROI REALTY 1,405.9
    (-2.8%)
    OMAXE 68.9
    (-3.7%)
    ORIENTAL TRIMEX 4.9
    (-2.8%)
    PACIFIC IND. 121.1
    (-5.6%)
    PARSVNATH DEV 6.6
    (1.2%)
    PATEL ENGINEERING 23.6
    (-5.3%)
    PENINSULA LAND 14.7
    (-5.1%)
    PG INDUSTRY 92.2
    (-2.8%)
    PHOENIX MILL 1,515.0
    (-1.9%)
    PRAJAY ENGINEERING 18.1
    (-6.9%)
    PRESTIGE ESTATES 1,179.4
    (-5.4%)
    PROZONE INTU 42.7
    (-4.4%)
    PSP PROJECTS 604.1
    (-7.5%)
    PURAVANKARA 167.4
    (-7.1%)
    PUROHIT CONST. 15.8
    (0.0%)
    PVP VENTURES 24.3
    (-3.8%)
    PVV INFRA 4.4
    (-4.0%)
    R.P.P. INFRA PROJECTS LTD. - (RIGHTS ENTITLEMENTS 27.6
    (-0.2%)
    RADHE DEVELOPERS 1.4
    (-2.8%)
    RAMKY INFRASTRUCTURE 445.5
    (-3.8%)
    RAVINDER HEIGHTS 32.8
    (-8.3%)
    RAW EDGE INDUSTRIAL SOLUTIONS 15.5
    (-4.7%)
    RAYMOND REALTY LTD. 377.9
    (-9.5%)
    RDB REAL ESTATE CONSTRUCTIONS LTD. 133.0
    (-5.0%)
    RDB REALTY & INFRA 38.6
    (-0.8%)
    REL.INDUS.INFRAS 648.5
    (-9.4%)
    RPP INFRA PROJECTS 62.5
    (-7.7%)
    SAB INDUSTRIES 133.4
    (5.0%)
    SADBHAV INFRA. PROJECT 2.5
    (-4.6%)
    SAMOR REALITY LTD. 77.3
    (3.0%)
    SANATHNAGAR ENTERPRISES 30.3
    (-4.4%)
    SBL INFRATECH 35.4
    (7.1%)
    SHANKARA BUILDING PRODUCTS 104.2
    (-4.3%)
    SHANTIDOOT INFRA 245.1
    (-5.0%)
    SHASHIJIT INFRAPROJECTS 2.7
    (1.1%)
    SHRADHA INFRA 30.3
    (-4.9%)
    SHRIRAM PROPERTIES 66.1
    (-3.1%)
    SIGNATUREGLOBAL 727.7
    (-5.1%)
    SIMPLEX INFRA 153.1
    (-7.5%)
    SIMPLEX REALTY 130.1
    (5.0%)
    SKIL INFRASTRUCTURE 0.9
    (-4.1%)
    SOBHA 1,202.8
    (-5.2%)
    SPML INFRA 153.0
    (-9.1%)
    SRI LOTUS DEVELOPERS AND REALTY LTD. 107.8
    (-6.3%)
    SSPDL 12.3
    (-5.0%)
    SUNTECK REALTY 288.0
    (-6.3%)
    SURAJ ESTATE DEVELOPERS LTD. 190.4
    (-5.3%)
    SURATWWALA BUSINESS GROUP 24.3
    (-4.6%)
    SVS VENTURES 10.2
    (0.5%)
    TARC 114.2
    (-7.0%)
    TCI DEVELOPERS 386.2
    (-2.0%)
    THAKKARS DEV 97.0
    (-4.7%)
    TIRUPATI SARJAN 7.9
    (1.0%)
    TWAMEV CONSTRUCTION AND INFRASTRUCTURE LTD 24.5
    (-5.0%)
    UDAYSHIVAKUMAR INFRA 21.7
    (-4.6%)
    UNISHIRE URBAN 1.4
    (8.3%)
    UNITECH 4.0
    (-7.3%)
    UNIVASTU INDIA 63.0
    (0.1%)
    VALOR ESTATE LTD 90.6
    (-7.6%)
    VEER GLOBAL INFRA 80.0
    (-1.2%)
    VICTORIA MILLS 5,400.0
    (-7.2%)
    VIPUL. 10.9
    (-2.0%)
    VISHNU PRAKASH 33.7
    (-8.9%)
    VISHNUSURYA PROJECTS AND INFRA LTD. 138.0
    (-3.9%)
    VIVIANA POWER TECH 659.0
    (-1.9%)
    VR INFRASPACE LTD. 143.9
    (0.0%)
    WELLESLEY CORP 273.8
    (-2.5%)
    WELSPUN ENTERPRISES 434.4
    (-5.5%)
    YURANUS INFRA 160.0
    (3.2%)
    ZODIAC VENTURES 1.3
    (-4.3%)