As of 2024, India had over 1,46,126 km of national highways, with thousands of kilometers added annually under government initiatives like Bharatmala Pariyojana. Companies involved in this sector are key contributors to economic development.
Some leading highway builders, responsible for constructing major expressways and highways, are currently trading below their three-year average P/E ratio.
Listed below are 3 stocks with P/E below their three-year average.
KNR Constructions Ltd
KNR Constructions is a prominent name in India’s road and highway construction industry, recognized for its proficiency in managing intricate EPC and BOT projects. The company specializes in the construction of roads, bridges, and flyovers, and also takes on large-scale irrigation projects.
The company has an order book worth Rs 4,406 crore out of which Rs 2,300 crore comes from road constriction projects. The remaining Rs 2096 crore comes from Irrigation and Pipeline projects,
With a market capitalization of Rs 8,293.61 crore, the shares closed at Rs 294.90 apiece, marking a 0.5 percent decrease from the previous closing price. The company is trading at a P/E of 7.63 as compared to a three-year P/E of 16.9.
Ashoka Buildcon Ltd
Ashoka Buildcon specializes in infrastructure development through EPC and BOT models, along with the sale of ready-mix concrete. The company has created special purpose vehicles (SPVs) for projects, securing ‘Toll Collection Rights’ in exchange for construction costs. It operates in four divisions: BOT, EPC, RMC & Bitumen, and Toll Collection.
The company has an order book worth over Rs 11,104 crore. They have constructed 14,000 lane kms of highways and illuminated 30,000 villages through Power T&D Projects.
With a market capitalization of Rs 7,159.85 crore, the shares were trading at Rs 255.05 apiece, marking a 1.1 percent decrease from the previous closing price. The company is trading at a P/E of 7.94 as compared to a three-year P/E of 8.45.
PNC Infratech Ltd
PNC Infratech is a prominent player in the infrastructure construction sector, with a strong focus on roads and highways. The company has an impressive track record of executing large-scale projects, including the Purvanchal Expressway, one of the key infrastructure initiatives in Uttar Pradesh.
The company boasts a robust order book worth approximately Rs.19,900 crore, providing strong revenue visibility as of H1 FY25. A significant portion of this order book, approximately 70 percent, consists of road EPC projects.
With a market capitalization of Rs 7,798.79 crore, the shares closed at Rs 304 apiece, marking a 4.6 percent decrease from the previous closing price. The company is trading at a P/E of 6.28 as compared to a three-year P/E of 12.3.
Written by Shwetha Sairam
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