5 Under the Radar Construction Stocks in India

5 under-the-radar construction stocks: MCap Rs 3,307-5,485 Cr. 4 trade below sector PE 24.79. Best ROE: 12.91% (Ahluwalia). Lowest D/E: 0.04 (Ahluwalia).

Under the radar construction stocks in India are among the most deeply discounted in any sector. Several road and highway EPC companies trade at single-digit PE multiples while executing on India’s National Infrastructure Pipeline, one of the most ambitious government spending programmes globally. L&T and NCC get all the institutional attention. The focused road EPC mid-caps get almost none.

NHAI is generating hundreds of billions of rupees in new construction contracts annually, and several mid-tier EPC companies are building highways with strong order books. The five overlooked construction stocks below each serve specific infrastructure sub-segments, with data .

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What Are Construction Stocks in India?

Under the radar construction stocks are smallcap and midcap EPC companies building roads, highways, water infrastructure, commercial buildings, or industrial facilities with limited institutional coverage compared to large-cap engineering conglomerates. These construction stocks are the focus of this article.

5 Construction Stocks Flying Under the Radar in India

The table below lists 5 construction stocks . Data from NSE filings. Sector average PE: 24.79x. Verify on nseindia.com before investing in any of these construction stocks.

1. KNR Constructions (KNR): One of the Top construction stocks to Watch

KNR Constructions is a Hyderabad-based road and highway EPC company building national and state highways, irrigation projects, and elevated roads across south and central India. CMP is approximately Rs 130 with a market cap of Rs 3,669 crore.

KNR Constructions has PE 9.30, among the cheapest in the entire infrastructure sector. ROE is 8.79% and D/E is 0.49. EPS (TTM) is Rs 14.02. The NHAI road programme is KNR’s primary order source, providing a sustained order pipeline at below-10x PE valuation. As tracked on Nifty India Infrastructure, the Construction sector PE stands at 24.79x.

Road EPC businesses are government-procurement-dependent with stretched receivable cycles from NHAI and state governments. Any slowdown in government road capex or arbitration delays on completed projects compresses cash flows significantly.

2. HG Infra Engineering (HGINFRA): One of the Top construction stocks to Watch

HG Infra Engineering is a Jaipur-based EPC company specialising in road and highway construction across Rajasthan, Delhi NCR, and other states, including HAM (Hybrid Annuity Model) projects. CMP is approximately Rs 508 with a market cap of Rs 3,307 crore.

HG Infra has PE 17.78 below the sector average and EPS (TTM) Rs 28.54. D/E is 1.54, elevated from HAM project financing where developers fund 40% of project cost and receive 15-year NHAI annuities. ROE is 9.10%. HAM converts lumpy revenue into long-term government-backed annuity income. The Construction sector PE stands at 24.79x.

D/E at 1.54 from HAM financing is the primary risk. While NHAI annuities are government-backed, construction-phase leverage creates interest pressure. Any NHAI payment delay on annuities compresses cash flows.

3. PNC Infratech (PNCINFRA): One of the Top construction stocks to Watch

PNC Infratech is an Agra-based road EPC company building national and state highways, bridges, and runway projects across India. CMP is approximately Rs 214 with a market cap of Rs 5,485 crore.

PNC Infratech has PE 7.49, one of the cheapest infrastructure stocks in India. ROE is 6.58% and D/E is 0.76. EPS (TTM) is Rs 28.54. At less than 8 times earnings, PNC Infratech appears significantly undervalued relative to its road order book. The sub-10x PE creates a margin of safety. The Construction sector PE stands at 24.79x.

The low ROE and moderate D/E both reflect the challenges of road EPC: thin margins and government payment delays. Any arbitration dispute on completed projects delays cash receipt and suppresses earnings.

4. Ahluwalia Contracts India (AHLUCONT): One of the Top construction stocks to Watch

Ahluwalia Contracts is a Delhi-based EPC company specialising in institutional buildings, hospitals, commercial complexes, and government projects, different from road EPC peers. CMP is approximately Rs 708 with a market cap of Rs 4,745 crore.

Ahluwalia has the best combined quality profile on this list: PE 21.09 near sector average, ROE 12.91% the highest here, and D/E 0.04 near zero. EPS (TTM) is Rs 33.59. Its vertical building specialisation benefits from India’s accelerating healthcare and education infrastructure investment. The Construction sector PE stands at 24.79x.

Vertical building construction has longer project durations, more contractor coordination complexity, and greater exposure to steel and cement input cost inflation than road EPC. The near-zero D/E provides excellent financial flexibility.

5. PSP Projects (PSPPROJECT): One of the Top construction stocks to Watch

PSP Projects is an Ahmedabad-based construction company focused on industrial facilities, commercial buildings, and government projects in Gujarat with national expansion. CMP is approximately Rs 943 with a market cap of Rs 3,737 crore.

PSP has PE 50.90 from compressed earnings (ROE 4.39%). D/E is 0.26 and EPS (TTM) is Rs 18.52. The Gujarat focus gives PSP access to the state’s sustained industrial and government infrastructure investment. ROE improvement as projects execute is the key re-rating trigger. The Construction sector PE stands at 24.79x.

The elevated PE reflects depressed earnings. A major project delay or cost overrun would further delay the ROE recovery thesis. PSP requires strong quarterly execution for the next 6-8 quarters to justify its current valuation.

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Why Do These Construction Stocks Stay Under the Radar?

Road and highway EPC companies trade at some of the lowest PE multiples in the market. This is partly justified by thin margins and government payment delays, and partly unjustified by the multi-decade infrastructure opportunity they execute on. L&T and NCC dominate institutional attention. The focused road EPC mid-caps remain deeply discounted.

The HAM model makes road EPC balance sheets appear more leveraged than traditional EPC peers, deterring balance-sheet-focused institutional investors. But NHAI annuity cash flow quality is equivalent to government-backed income, which changes the risk profile completely.

Key Factors to Evaluate These Construction Stocks

Before investing in any of these construction stocks, review these five parameters:

• NHAI execution pace: NHAI project award data is publicly available. Rising NHAI awards are the strongest tailwind for KNR, HG Infra, and PNC Infratech among these under the radar construction stocks.
• Order book as revenue multiple: A healthy order book of 3-4x annual revenue provides 36-48 months of revenue visibility. Strong order inflows drive re-rating.
• ROE above 8%: Ahluwalia (12.91%) leads. Road EPC companies in the 6-10% ROE range are typical for capital-intensive EPC with government customers.
• PE vs sector PE: The sector PE is 24.79. KNR (9.30), PNC (7.49), HG Infra (17.78), and Ahluwalia (21.09) all trade at or below that.
• Receivable management: Quarterly debtor days trends are a key execution quality indicator for all these under the radar construction stocks.

Risks in Under the Radar Construction Stocks

Every investment in construction stocks carries risk. The four primary risks are:

• Government payment delays: NHAI and state clients regularly delay payments, compressing working capital and forcing unfavourable borrowings.
• Input cost inflation: Steel, bitumen, cement, and fuel cost overruns on fixed-price contracts reduce project margins directly.
• Execution risk: Large EPC projects require coordination of hundreds of contractors. Any supply chain disruption or land acquisition delay extends timelines.
• HAM project debt risk: HG Infra at D/E 1.54 faces cash flow pressure if NHAI annuity payments are delayed during construction completion.

How to Invest in Overlooked Construction Stocks in India

Track NHAI quarterly award announcements. Rising project awards translate into order book additions for KNR, HG Infra, and PNC Infratech.

Monitor quarterly order book disclosures. Order book above 3x annual revenue provides multi-year earnings visibility.

Check receivables DSO in quarterly balance sheets. Stable or declining DSO confirms operational execution efficiency.

Verify all data on NSE (nseindia.com) or BSE (bseindia.com). Construction investor presentations include order book and EBITDA margin data.

Conclusion: Top Construction Stocks Under the Radar in India

India’s infrastructure build-out is multi-decadal and the companies executing it are some of the most undervalued in the market. KNR Constructions, HG Infra, PNC Infratech, Ahluwalia Contracts, and PSP Projects represent five execution models within construction. These under the radar construction stocks are shared for research only. Consult a SEBI-registered advisor before investing.

The five construction stocks discussed in this article are KNR Constructions, HG Infra Engineering, PNC Infratech, Ahluwalia Contracts India, PSP Projects. Each of these construction stocks carries unique risks and opportunities. Always verify current data on NSE (nseindia.com) or BSE (bseindia.com) before making any investment decision in these or any other construction stocks.