Shares of infrastructure companies have rallied more than 2% each on hopes of rate cut by the Reserve Bank of India (RBI) at its policy review on June 18.
“Most economists polled now expect the RBI to cut interest rates at its policy review later this month, driven by dismal economic data, falling oil prices and recent comments by a central bank official,” the Reuters report suggests.
As many as 185 infrastructure and construction companies has reported an aggregate 36% year-on-year fall in their net profit due to over 43% surge in interest cost during the fiscal 2011-12.
Any rate cut by RBI will eventually reduce the cost of borrowing which in turn may help companies to chalk out capex plans, according to the analyst.
Among the individual stocks Lanco Infratech, GMR Infrastructure, HDIL, Unitech, Reliance Infrastructure and Indiabulls Real Estate are trading 2-4% higher on the Bombay Stock Exchange.
