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Order inflow in the infrastructure sector (Exhibit 2) was better in Q1FY27, at INR494bn (vs. INR341bn in Q1FY26), led by road EPC players, with PNC, HG Infra, Ceigall & GR outperforming. T&D contractors led by KEC and Kalpataru sustained the momentum, and RVNL secured a healthy start against its FY27 guidance. Q4FY26 order book continues to provide strong revenue visibility (1.8–5.1x), supporting execution into FY27. Financial performance of our coverage universe is expected to improve for Q1FY27, with revenue/EBITDA growth of ~6%/8% YoY. Stock wise, PSP, PNC, Ahluwalia and Ashoka are likely to deliver strong revenue growth. HG Infra, KNR and IRCON are expected to see weak revenue on YoY basis. NCC has secured orders worth INR 40.7 bn in Q1FY27, and its robust order book (INR 723 bn; 3.9x visibility) offers strong multi-year growth visibility. Top picks: NCC, Ahluwalia & PNC

Industry order inflow improves:

Order inflow was better in Q1FY27, with the industry reporting (Exhibit 2) inflow of INR494bn (vs. INR341bn YoY), led by road players. In road EPC, Ceigall (INR28bn; 51% of FY27 guidance achieved) and HG Infra (INR45bn; ~39% achieved) outperformed, while GR Infra (INR62bn; ~30% achieved), PNC (28% achieved), KNR (~17% achieved) and Ashoka Buildcon (~12% achieved) lagged. Building EPC inflow was absent, with Ahluwalia Contracts, PSP Projects and Capacite yet to report inflow against their FY27 guidance. Among diversified players, JKumar (INR41bn; ~43% achieved) outperformed, while Afcons (INR57bn; 19% achieved) and Dilip Buildcon (~3% achieved) remained subdued. T&D contractors saw sustained momentum with INR125bn inflow led by KEC (INR66bn) and Kalpataru (INR50bn). In railways, RVNL secured INR52bn (17% of its INR300bn guidance), while IRCON’s and RITES’ inflow was negligible, highlighting a slow start to FY27 across road and rail EPC, cushioned by T&D strength.

Order book continues to provide strong visibility:

Q4FY26 order book provides strong revenue visibility (1.8–5.1x), supporting execution momentum into FY27. Among diversified names, NCC's large order book (INR723bn; 3.9x) offers robust multi-year visibility, while HG Infra (1.8x) had the weakest order book growth, underscoring the need for order replenishment. In railways, RVNL (INR992bn; 4.8x) and RITES (3.8x) provide strong visibility, while IRCON (2.7x) provides moderate visibility.

Financial performance  Earnings recovery underway:

Q1FY27 performance across the infra universe is expected to improve, with revenue growing ~6.2% YoY and EBITDA up 8.4% YoY (margin at 8.5%, +17bps YoY). Among key names, PSP Projects (+30% revenue, +90.8% EBITDA), RVNL (+10% revenue, +80.5% PAT on a low base), AHLU, ASBL and PNC are expected to see strong YoY growth, while NCC, Dilip Buildcon and RITES are likely to report moderate growth. HG Infra (-5% revenue, PAT -13%), KNR Constructions (-5% revenue, PAT -28% with -358bps margin compression) and IRCON (EBITDA -26% YoY) are likely to see major weakness in Q1 financials.

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