Dark Horse Sector: Nifty Infra

Despite the selling pressure in the overall Indian markets in the last couple of weeks, there is one sector that had gained traction and attention from the market participants as it displayed an outstanding performance. The sector is Nifty Infra, which had hit its fresh all-time high at 5362.80 on Monday before correcting a little.

While the Nifty is down by 4.5% from its all-time high, Nifty Infra is down by a mere 2.8%. The YTD performance of Nifty Infra stands at 41.80% while its 3-month performance delivered 13.20% returns. The sector has indeed performed better in the short term as well for the long term. One stock that is helping Nifty Infra to scale new heights is Larsen and Toubro Limited (LT).

L&T has the highest weightage in Nifty Infra and is the largest infrastructural company in India. It has a market capitalization of Rs 2,66,498 crore. The FIIs and the mutual fund houses have consistently increased their holdings in the company QoQ. The FIIs currently hold a 22.86% stake while the DIIs have a 33.34% share in the company. The YTD performance of L&T is exceptionally good delivering 47.33% returns and its 3-month performance stands out at 16.18%. With these kinds of figures, L&T certainly remains a good stock to hold for the short to medium term.

L&T recently came out with good quarterly results and the market took it positively as it achieved the all-time high of Rs 1981. In the last trading session, the stock dipped 2.86% and it looks to take support near its 20-DMA. The 20-DMA indicator is the key indicator that tells us about the short-term outlook of the stock and it is used by many. The RSI looks strong at 66.

Historically, we have seen L&T taking support of its 20-DMA before resuming its journey upward. The stock trades strong and technical parameters suggest that the performance is likely to continue for some more time. Traders can look for an opportunity for upcoming days.