Budget 2026: Infrastructure Stocks Set for Road Capex Boost
Market expert Raja Venkatraman from NeoTrader shares his analysis on infrastructure stocks ahead of Budget 2026. The government's continued focus on road and highway spending creates opportunities for investors.
Sustained Government Spending on Roads
Brokers and policy analysts expect the government to maintain strong capital expenditure on roads and highways in Budget 2026. This spending supports economic growth and job creation while fulfilling election commitments.
The focus has shifted from announcing new projects to faster execution of existing initiatives. These include Bharatmala projects, multimodal logistics parks, and better connectivity to economic clusters.
Key expectations for the roads sector include:
- Sustained or slightly higher allocations to the Ministry of Road Transport and Highways
- Emphasis on economic corridors, border roads, and expressways
- Greater use of hybrid annuity models and infrastructure investment trusts
Healthy Order Flows for EPC Companies
Engineering, procurement, and construction companies continue to receive healthy orders through FY25-26. The National Highways Authority of India and state agencies maintain steady tendering activity.
Analysts watch for budget signals on contractor payments and dispute resolution. Faster cash flows could improve ratings for infrastructure companies.
Prominent Infrastructure Stocks to Watch
Several listed companies stand to benefit from continued road spending:
- Larsen and Toubro Ltd
- IRB Infrastructure Developers Ltd
- Ashoka Buildcon Ltd
- KNR Constructions Ltd
- PNC Infratech Ltd
- Dilip Buildcon Ltd
- HG Infra Engineering Ltd
- G.R. Infraprojects Ltd
These companies typically see increased retail investor interest before budget announcements. Many maintain strong order books with growing shares of central and state road projects.
Recent Performance Analysis
Recent market performance shows clear momentum shifts among infrastructure stocks. Larsen & Toubro and Dilip Buildcon demonstrate strength aligned with infrastructure spending trends.
Other companies face execution delays or cost pressures. Some stocks have reached multi-month lows. Overall, the sector shows recovery potential through 2026.
Larsen & Toubro: Infrastructure Leader
L&T maintains strong momentum across multiple sectors. The company secured major contracts in transportation, hydrocarbons, and building projects during 2025.
Recent developments include:
- Large orders in transportation infrastructure
- Major contracts in hydrocarbon projects
- Expansion into sovereign cloud services
- Sustainable construction solutions
The stock shows encouraging price action ahead of Budget 2026. Technical analysis suggests potential movement toward ₹4,600 within six months if current support levels hold.
Dilip Buildcon: Project Pipeline Strengthens
DBL recently strengthened its project portfolio with significant contract wins:
- ₹3,400 crore EPC contract for Ganga Path project in Bihar
- Preferred bidder status for ₹5,000 crore NALCO mining project
Despite quarterly revenue pressures, the company shows steady growth throughout 2025. Technical indicators suggest potential movement toward ₹650 within six months with proper risk management.
Investment Considerations
The infrastructure sector shows promise ahead of Budget 2026. Government spending on roads and highways provides tailwinds for selected companies.
Investors should monitor budget announcements for specific allocation details and policy directions. The sector requires careful selection given varying company performances and market conditions.
Market sentiment remains cautiously optimistic. Infrastructure stocks with strong order books and execution capabilities appear best positioned to benefit from continued government spending.
