Road and highway companies in India have seen their shares tumble more than half in the last 12 months, and the slowdown shows no signs of ending soon.
Market Decline Overview
Across the sector, listed road builders have lost an average of 53% of their market value over the past year. The biggest losers are:
- KNR Construction: down 53%
- H.G. Infra: down 51%
- Ashoka Buildcon: down 46%
- IRB Infrastructure: down 26%
- PNC Infratech: down 25%
- Dilip Buildcon: modest 5% gain, but still underperformed the broader market
Why Project Awards Are Stalling
Two main factors are hurting the sector:
- Flat budget capex – the government has not increased road spending in the FY26 budget, so new projects are scarce.
- Halted Bharatmala awards – for the second year in a row, the government paused new project awards under the Bharatmala programme, keeping the pipeline thin.
Because of this, the share of listed developers in total road work has fallen sharply: from about 61% in FY16‑18 to just 24% in FY25.
Recent Earnings Snapshots (Q2 FY26)
Company results show a mixed picture, with most firms seeing falling revenue and volatile profits.
- KNR Construction: profit after tax (PAT) down 76%; revenue down 69%.
- H.G. Infra: PAT down 35%; revenue almost flat (+0.23%).
- Ashoka Buildcon: PAT down 83%; revenue down 25%.
- Afcons Infrastructure: net profit down 22%; revenue up 0.4%.
- IRB Infrastructure: PAT up 41%; revenue up 2.8% – helped by steady toll collections.
- PNC Infratech: PAT up 158%; revenue down 21% – cost control drove the profit jump.
- Dilip Buildcon: PAT down 22%; revenue down 21%.
Analyst Outlook
Experts advise caution. With limited new road orders and flat capex, companies may struggle to win projects at healthy margins. Diversifying into other infrastructure segments could become essential.
One analyst notes that the real catalyst for the sector will likely come after the upcoming budget announcement. Another market strategist points to the recently approved Rs 19,142 crore Nashik‑Solapur‑Akkalkot six‑lane corridor as a possible source of renewed interest, but still recommends a careful approach, highlighting Afcons as a relatively safer pick.
Bottom Line
The road construction space remains under pressure due to stagnant government spending and a slowdown in project awards. While a few companies have managed to improve profitability through cost cuts, most are battling shrinking revenues. Retail investors should stay vigilant and consider limiting exposure until clearer policy signals emerge.
Remember, this is perspective, not a prediction. Do your own research before making any investment decisions.