KNR Construction, a key player in the segment, is down 53% while H.G. Infra plunged 51% over a one-year period. Ashoka Buildcon, IRB Infrastructure and PNC Infratech have corrected 46%, 26% and 25%, respectively, while Dilip Buildcon, despite eking out a modest 5% gain, has largely underperformed and remains a market laggard.
Parvez Qazi, a Nuvama Institutional Equities analyst sound a caution for stocks in the road space. He argues that the ability of companies to win adequate road orders at desired margins is now under question due to sluggish road awards.
A note, co-authored by Vasudev Ganatra, said that road awarding remained subdued in FY25 for a second year in a row due to the government’s decision to halt project awards under the Bharatmala programme. With no increase in road capex in the budget for FY26E, a pickup in road awards is unlikely, he added.
The market share of listed developers plunged from 61% over FY16–18 to 31% over FY19–21 and 25% over FY22–24. The market share further decreased to 24% in FY25.
The report noted that the NHAI awarded 209 km road projects in December 2025 and the pace of construction increased YoY to 687 km in the month against 630 km in December 2024. “Year-to-FY26 NHAI road awards aggregated 676 km (up 2% YoY) while YTD FY26 road construction fell 4% YoY. News reports indicate that the NHAI has invited bids for 52 road projects totalling 2,188 km worth Rs 1.15 lakh crore,” it said.
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What earnings suggest?
The lack of awards is reflected in the companies’ revenues even as their profits show a mixed picture. An analysis of their Q2FY26 shows road construction companies reported a weak and uneven performance in Q2FY26, with most players grappling with sharp revenue contraction and volatile profitability.
KNR Construction was among the worst hit, with profit after tax plunging 76% and total revenue shrinking 69%, highlighting execution challenges and a slowdown in project activity. H.G. Infra saw its PAT decline 35%, even as revenue was largely flat with a marginal 0.23% growth in topline. Ashoka Buildcon posted a steep 83% drop in PAT along with a 25% fall in revenue, reflecting weak order execution and higher costs. Afcons Infrastructure reported a 22% net profit decline while a marginal 0.4% uptick in revenue.
On the positive side, IRB Infrastructure delivered a relatively resilient performance, reporting a 41% rise in PAT supported by a 2.8% increase in revenue, aided by stable toll collections and operational efficiencies. PNC Infratech recorded a sharp 158% jump in PAT despite a 21% decline in revenue, suggesting improved cost control and lower finance expenses. Dilip Buildcon also struggled, with PAT falling 22% and revenue declining 21%, underscoring persistent sector headwinds. Overall, the results point to continued stress in the road construction space, marked by muted execution, revenue pressure and selective balance-sheet-driven profit recovery.
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What’s the outlook?
Nuvama remains cautious on the roads space and said that muted capex growth could accentuate the concerns around road awards. It further argues that “road developers must work on segmental diversification since their ability to win adequate road orders at desired margins is now under question”.
Expert Kranthi Bathini said that the capex theme in general has been undergoing consolidation for almost 9-10 months and the road construction theme has taken a hit as well. In his view, the real triggers will be visible after the budget announcements.
Referring to the Cabinet’s recent approval of the Rs 19,142 crore Nashik–Solapur–Akkalkot six-lane Greenfield corridor, the Director–Equity Strategy at WealthMills Securities expects renewed traction in smallcap and midcap stocks in the run-up to the budget. While he recommends a cautious approach, his bet is placed on Afcons.
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(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)