Brokerage Call: 2 Infra Stocks in Which CLSA Sees 71% Upside

Synopsis: CLSA turned bullish on two infrastructure stocks with up to 71% upside potential, supported by rising toll revenues, strong order backlog, promoter buying, and expected execution recovery.

Infrastructure plays a crucial role in driving India’s economic growth and is considered a key enabler in the country’s journey toward becoming a US$ 26 trillion economy in the long term and achieving the US$ 5 trillion economy target. 

The government has been focusing heavily on developing world-class infrastructure across sectors such as roads, power, bridges, dams, and urban development. A major initiative supporting this push is the $1.3 trillion Gati Shakti National Master Plan, which aims to improve connectivity, reduce logistics costs, and create a more efficient system for transportation and trade across the country.

Brokerage firm CLSA has highlighted renewed optimism in India’s infrastructure sector, identifying opportunities in companies benefiting from strong project pipelines and improving financial metrics. 

It has expressed confidence in two infrastructure stocks, citing factors such as rising toll collections, robust order books, and a few more as indicators of potential growth and a possible recovery in performance.

Price Movements 

With a market capitalisation of Rs. 24,422 cr, the shares of IRB Infrastructure Developers Ltd closed at Rs. 40.40 per share, down from its previous close of Rs. 40.80 per share. The stock has fallen 10% in the past year, while posting a 4% decline both year to date and over the last six months, and a 6% drop in the past month.

With a market capitalisation of Rs. 8,811 cr, the shares of NCC Ltd closed at Rs. 140.35 per share, down from its previous close of Rs. 142.80 per share.  The stock delivered a 24% negative return over the past year, declined 12% year to date, fell 31% in the last six months, and dropped 9% in the past month.

CLSA Commentary 

CLSA has turned bullish on select Indian infrastructure stocks, highlighting strong growth potential and improving sector fundamentals. The brokerage believes companies with solid order books, rising toll collections, and improving balance sheets could see significant upside in the coming years as India continues to invest heavily in infrastructure development.

Among its top picks is IRB Infrastructure Developers, for which CLSA has maintained an “Outperform” rating with a target price of Rs. 69, indicating a potential upside of 73% from current levels. 

The optimism is driven by the company’s 11% year-to-date growth in toll revenue, reflecting strong traffic trends on its road assets. CLSA also noted that IRB plans to significantly expand its asset portfolio by about 75% while aiming to become net debt-free by FY30, a strategy that could strengthen its financial position and support long-term earnings growth.

CLSA is also positive on NCC Ltd, maintaining an Outperform rating with a target price of Rs. 234, which implies roughly 68% upside potential. Although the company reported a relatively weak Q3 FY26 performance due to heavy monsoon conditions and slower execution of projects, CLSA expects this to be temporary. The brokerage pointed out that NCC’s order backlog surged 43% year-on-year, providing strong revenue visibility for the coming quarters. It expects execution to improve and margins to recover starting from Q4 FY26 as project activity normalises after the monsoon disruption. 

Another factor boosting CLSA’s confidence is recent insider buying by the founders of both companies. According to the brokerage, such purchases, although small ones often signal management confidence in the companies’ future prospects and may indicate expectations of a turnaround or stronger performance ahead.

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