India’s rural road-building push is far from over.
The Union Cabinet has extended the Pradhan Mantri Gram Sadak Yojana-III (PMGSY-III) till March 2028. Along with the extension, the government has raised the scheme’s outlay to ₹83,977 crore from ₹80,250 crore earlier.
Sector Outlook: Why Rural Connectivity is the New Priority
The next phase will focus on improving rural roads that connect villages to agricultural markets, schools, and hospitals. The approval also includes 161 long-span bridges and a longer execution timeline for projects in difficult terrains.
For infrastructure companies, this means fresh order opportunities. Rural roads, bridges, and connectivity projects could see a new round of tendering over the next few years. Beyond this outlay, these companies are also closely linked to ₹12.2 lakh crore CAPEX announced for FY27.
Against this backdrop, here are 3 stocks that could benefit from the government’s continued push for rural infrastructure.
#1 NCC: Infrastructure Giant is Set for a Massive Q4 Turnaround
NCC is a leading Engineering, Procurement, and Construction (EPC) and infrastructure company.
The company builds public infrastructure, sustainable energy systems, and essential urban and rural developments. The company has deep expertise in the construction of buildings, roads, affordable housing, hospitals, and more.
NCC is significantly exposed to India’s road-building push. Road construction and maintenance is its core business, accounting for 16% of revenue. The company executes complete EPC road projects across India. The company’s competitive edge in building highways and bridges makes it well-positioned to capitalize on the opportunity.
Navigating 9MFY26 Profitability Hurdles
However, in 9MFY26, due to delays in project clearances and the execution of the order book, the company faced challenges on the profitability front. In 9MFY26, revenue declined by 9% year-on-year to ₹14,693 crore. EBITDA fell 5.6% to ₹1,286 crore, while margins remained stable at 8.6%. However, net profit declined by 17% to ₹469 crore.
The ₹79,571 Crore Visibility Engine
NCC enjoys robust medium-term revenue visibility, supported by its all-time high consolidated order book of ₹79,571 crore as of Q3FY26. This provides NCC with ample execution headroom and the flexibility to sequence project activities effectively. Although the order book provides revenue visibility for over 3 years, execution remains the key to watch.
The company’s order book is well diversified across sectors. Buildings accounted for 31% of the order book, followed by Transportation (22%), Electrical T&D (18%), Mining (13%), and Water & Railways. This diversification provides NCC with recurring order inflows.
NCC’s future order pipeline is supported by the clearance of pending projects. All stuck projects have now received their necessary clearances, and site mobilizations are now fully complete. A few mega projects have been cleared and are ready, which is expected to drive revenue in Q4.
Solving the Jal Jeevan Mission Liquidity Crunch
A major headwind for NCC in recent quarters was delayed payments, particularly from the Jal Jeevan Mission projects, which severely impacted execution rates. As of Q3FY26, the company’s unbilled revenue stood at ₹7,129 crore (44% of turnover). Looking ahead, the financial outlook is stronger as it has already begun receiving funds.
The government has created a revised estimate provision of ₹17,000 crore scheduled to be released before March 2026. It has also outlined a substantial budget of ₹67,670 crore for the next year. Management expects payment momentum to be sustained over the coming months.
#2 Dilip Buildcon: Asset-Light Pivot Prepares for ₹10,000 Crore Revenue Jump
Dilip Buildcon (DBL) is one of India’s prominent infrastructure companies. Originally a pure-play road construction firm, DBL is now a diversified player that manages the entire project lifecycle, from design and engineering to construction, commissioning, and maintenance.
DBL’s foundational business and largest vertical is construction (66% of the business mix). This sustained capital outlay strengthens the groundwork for the company to secure a steady stream of new construction contracts. The remaining portion comes from Coal Mining (22%) and Hybrid Annuity Model (11%).
Revenue Visibility: Analyzing the ₹29,372 Crore Pipeline
To understand where DBL’s future revenue will come from, we look at its unexecuted order book. As of Q3FY26, DBL’s total order book stands at a historic high of ₹29,372 Crores, providing revenue visibility of over two years, based on FY25 revenue of ₹11,317 crore. Given this robust order book, DBL’s management anticipates strong top-line growth.
The ₹10,000 Crore Revenue Outlook for FY27
Revenue for FY26 is expected between ₹7,000-7,500 crore due to a muted order environment. The company expects revenue to jump to around ₹10,000 crore in FY27 as new orders enter execution. DBL is also well-positioned to benefit from long-duration businesses such as InvITs, mining, and renewable energy platforms.
This diversification, often referred to as an asset-light approach, aims to generate predictable, sustainable cash flows and improve Return on Investment (ROI) compared to historical levels. This will also reduce the cyclicality and risks inherent in the construction bidding business.
Operational Divergence: Why Profits Rose as Revenue Fell
From a financial perspective, in 9MFY26, revenue declined by 19% year-on-year to ₹6,684 crore. EBITDA fell 8% to ₹1,373 crore, while margins improved to 20.5%. However, net profit increased by 126% to ₹1,275 crore, driven mainly by exceptional items from divestments to the InvIT.
#3 Ashoka Buildcon: Asset Monetization Fuels EPC Expansion and 15%+ Returns
Ashoka Buildcon is a major integrated infrastructure development company. Its core operations are the construction of infrastructure facilities primarily on an EPC basis, as well as through BOT and HAM. In addition to infrastructure construction, the company also generates revenue from the sale of goods, specifically Ready-Mix Concrete, and real estate development.
Road construction is the largest segment, accounting for 52% of revenue. It develops national and state highways, access-controlled expressways, and complex structures such as India’s first 8-lane, extra-dosed cable-stayed bridge over the Narmada River, as well as elevated airport link roads.
Segmental Strength: Roadways and the ₹15,927 Crore Order Book
As of 31 December 2025, Ashoka Buildcon’s total order book stands at ₹15,927 crore. Roads and railway projects dominate this portfolio, comprising 65% (₹10,292 crore) of the total. Within the road segment, EPC road projects account for ₹7,025 crore, while HAM (Hybrid Annuity Mode) projects stand at ₹1,705 crore.
De-leveraging Through Divestment: The ₹1,814 Crore Maple Exit
The order book provides revenue visibility of around 1.5 years, based on FY25 revenue of ₹10,037 crore. In addition, the company is actively pursuing upcoming government awards, with a current bid pipeline of around ₹65,000 crore for NHAI projects. The company anticipated an order intake of ₹3,000 to ₹3,500 crore in the final months of FY26 alone.
The company is also generating revenue from its aging road assets. In November 2025, it sold its entire stake in five BOT SPVs to Maple Infrastructure Trust for a total of ₹1,814 crore. This cash infusion helps reduce debt and reinvest in its core EPC business, where it expects to generate higher returns (an Internal Rate of Return of 15% to 18%).
Profitability Paradox: Deciphering the 89% Net Profit Surge
From a financial perspective, in 9MFY26, revenue from operations declined by 23% year-on-year to ₹5,711 crore. EBITDA fell 22% to ₹1,765 crore, while margins improved to 31.7%. However, net profit increased by 89% to ₹2,429 crore, driven mainly by exceptional items from the divestment of five BOT SPV assets to Maple Infrastructure Trust.
Valuation Gap: Are Road EPC Stocks Trading at a Discount?
Ashoka Buildcon has the highest return ratios (Return on Capital Employed and Return on Equity), followed by NCC and Dilip Buildcon. The valuations of all three companies have corrected due to market weakness and slower order awarding during FY26.
Dilip Buildcon and Ashoka Buildcon are trading at a discount relative to both their historical and industry average multiples. NCC is trading broadly in line with both the industry and its own historical valuations.
| Valuation Comparison (X) | |||||
| Price-to-Earnings Multiple | Return Ratios | ||||
| Company | Company | 5Y Median | Industry Median | RoCE (%) | RoE (%) |
| NCC | 14.3 | 15.0 | 19.0 | 21.7 | 11.4 |
| Dilip Buildcon | 11.9 | 23.9 | 19.0 | 14.8 | 10.0 |
| Ashoka Buildcon | 3.7 | 6.6 | 19.0 | 39.7 | 54.8 |
| source: screener.in (Data as of 6th May 2026) | |||||
Execution Watch: The Key Monitorable for FY27
Despite near-term execution challenges and slower order inflows in FY26, the government’s continued focus on rural connectivity and infrastructure spending keeps the long-term opportunity for road EPC players intact.
NCC, Dilip Buildcon, and Ashoka Buildcon enter this cycle with strong order books, improving liquidity visibility, and asset monetisation-led balance sheet support. The key monitorable now is execution recovery. Meanwhile, keep these stocks on your watchlist.
Disclaimer:
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data were unavailable have we used an alternative, widely accepted, and widely used source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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