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Wednesday, April 21, 2010

Construction firms to post double digit Q4 growth

Construction and building firms are expected to post double digit growth in Jan-March as an economic rebound and government spending boosts realty sector, industry experts and analysts said.

Between 2007 and 2012, India plans to spend $514 billion -- with private firms contributing 36 percent -- to overhaul its creaky infrastructure that is an obstacle to achieving faster growth in Asia's third largest economy.

India's 2010-11 budget allocated 46 percent of the total plan allocation amounting to 17 trillion rupees for infrastructure development in the country.

According to a Reuters' poll of 16 brokerages, IVRCL Infrastructures is expected to post a 11.20 percent rise in net profit and Lanco Infratech a 58.63 percent jump. However, engineering firm Engineers India is slated to post 19.25 percent drop in profit.

"Normally, Jan-March is always the strongest quarter for construction companies," Shailesh Kanani, an analyst with Angel Broking said, adding that the order inflow "has been good".

Kotak Securities, in its report, said strong order backlogs will drive revenue growth for construction sector.

HCC's order book should drive revenues up 22 percent over fiscal 2010-2012, Motilal Oswal said in a report.

HCC, which won 4.9 billion rupees from tunnelling contracts and metal sector clients this quarter, is expected to post a 10.7 percent year-on-year growth in sales, brokerage Prabhudas Lilladher said in a note.

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