Blog: Transport Sector India

Mobility and infrastructure are the backbone of any country’s growth, as the ability to move people and goods efficiently and at minimum costs has a large effect on the economy. India is road dependent when it comes to transport, but to change this, green transportation is becoming increasingly important, to both lower the fuel consumption and fight climate changes.

• With a total length of 6,2 million km, India possesses the world’s second-largest road network.
  • National Highways/Expressways cover 136 440 km
  • State Highways cover 176 818 km
  • Other Roads cover 5 902 539 km
• Indian Railways has a total network of 64,689 km and it is Asia’s and the world’s second-largest rail network
  •  Approximately 71 per cent or 45 881 km of these, have been electrified as of 31.03.2021.​
  • By 2024, Indian Railways wants to run entirely on electricity by 2024, and by 2030 it hopes to achieve a net-zero emission network.​

For the future, India’s three important areas are roads, trains, and ports. Over time the goal is to develop these to reach an expectable level:

Ports – There are a project to both build and maintain a number of ports and harbours. The Sagarmala project identified 12 key ports for freight handling until 2035. In addition, there is development towards improving the inland waterways and water inland water transportation.

Railway – A few high-speed trains is already under development. Japan and India are working together to connect Modi’s home state Gujarat with Maharashtra and Mumbai. A larger focus on dedicated freight lines is on planning.  And improved technology solutions for increased safety on level crossings and other important areas.

Roads – By end of 2022, the government had plans to build 65,000 km of national highways for a total cost of US$ 741.51 billion.​ The government have also approved 100 % foreign direct investment in the road and highway sector

When it comes to relevant stocks for the transport sector at the Nifty 50, the automobile and auto component sector is relevant..

These are the main stocks to know about:

Maruti Suzuki India is the largest company from the transport sector listed at Nifty 50 with 1,3 % of the Index. The company is based in New Delhi and majority owned by Suzuki who holds more than 55 % of the company.  Maruti Suzuki is the market leader in the Indian car market with 44 %.

Tata Motors is the second car company at the Nifty 50, with 1 % of the Index. It is a global car manufacturer based in Mumbai, a part of the Tata-conglomerate that own about 45 % of the company. Tata is also the owner of Daewoo and Jaguar Land Rover which produces Jaguar and Land Rover.

Mahindra & Mahindra is a part of the Mahindra conglomerate and is listed on Nifty 50 with 1% of the index. The conglomerate owns about 19 % of the company. In addition to be one of the big car producers in India, its subsidiary Mahindra Tractors is the largest tractors-producer in the world based on volume

Bajaj Auto is a part of the conglomerate Bajaj Group who own more than 50 % of the company. It is listed at Nifty 50 with 0,6 % of the index and based in Pune. The company produces motorbikes, scooters, and rickshaws, being the world largest producer of three-wheelers and third largest producer of motorbikes.

Eicher Motors was established in 1948 and is listed at Nifty 50 with 0,5 % of the Index. Its main products are trucks, busses, and motorbikes. It has established a joint venture with Volvo, producing different types of vehicles and engineering work. Eicher Motors is also the owner of Royal Enfield, the most popular and classical motorcycle brand of India

Hero MotoCorp is a producer of motorbikes and scooters based in New Delhi. It is listed at Nifty 50 with 0,4 % of the Index. The company is the largest producer of two-wheelers in the world and has 37 % of the Indian market. Hero MotoCorp started as a joint venture with Honda, but is now majority owned by the Munjal family, with about 35 % of the shares.

Source: maiervidorno.com