Hidden Gem: Vanguard and BlackRock’s Top Nuclear Stock Pick To Add To Your Watchlist 

Synopsis: A legacy infrastructure player with deep nuclear and complex engineering exposure is drawing fresh market attention as large global and Ace investors increase stakes. Balance sheet repair, rising order visibility and India’s expanding nuclear ambitions could shape whether this overlooked construction name becomes a serious long-term turnaround story. 

A civil construction stock with deep nuclear infrastructure credentials is in focus as India prepares for a larger nuclear power roadmap. The company is not a pure nuclear stock, but its long history in building complex infrastructure, especially nuclear and hydro projects, has brought it into the spotlight at a time when the country is looking to expand nuclear capacity sharply over the next two decades.

Hindustan Construction Company, or HCC, is currently trading at Rs. 23.31, with a market capitalisation of around Rs. 6,105.98 crore. The stock has also seen interest from large investors, with Vanguard owning around 2.29 percent stake in the company. The BlackRock-owned iShares Core MSCI Emerging Markets ETF bought a fresh 1.08 percent stake in the company. Ace investor Mukul Agrawal also bought around 1.68 percent stake in the December quarter and increased it to around 1.91 percent in the March quarter.

Why Is HCC Suddenly Getting Attention?

HCC is one of India’s oldest infrastructure companies and was founded in 1926. The company is engaged in civil construction across roads, bridges, ports, power stations, water supply and irrigation projects. However, its real strength lies in complex engineering work, especially hydel power, water systems, nuclear power, process plants and transportation infrastructure.

This is what makes HCC different from many ordinary construction companies. It is not just building simple roads or buildings. It has worked on difficult projects where technical qualification, safety standards and execution experience matter. The company highlights that it has contributed to 4,036 lane km of highways, 395 km of tunnelling, 60 percent of India’s installed nuclear power capacity and 26 percent of India’s installed hydro power capacity.

That nuclear track record is now becoming more important because India is trying to scale up nuclear power. According to the latest updates, HCC is looking to venture into light water reactors, or LWRs, as part of India’s nuclear energy roadmap. LWRs are the most common reactors globally, while India has traditionally been more dominant in pressurised heavy water reactors, or PHWRs.

The company has reportedly built 14 of India’s 24 nuclear reactors. This gives HCC a strong reference base at a time when India is planning to add almost 100 GW of nuclear power by 2047. The company believes a large nuclear programme could unfold over the next 10 to 12 years, and that it is well positioned to participate.

The Nuclear Opportunity: Big, But Not Immediate

The nuclear opportunity is the most exciting part of HCC’s story, but it is important to understand the timeline clearly. In the Q3FY26 earnings call, management said the SHANTI Act is a big step because it creates a path for private sector participation in nuclear power development and operations. Management also said that several entities are showing interest in collaborating with HCC because of its nuclear-grade safety and quality record.

The opportunity is not limited to India’s existing reactor technology. Management specifically referred to Indian technology, light water reactors and EPR-type technologies as possible areas that could come into the nuclear roadmap. This is important because if India starts combining PHWRs, indigenous LWRs and possible foreign reactor technologies, the size of the construction and EPC opportunity could increase meaningfully.

However, this is not an immediate revenue trigger. Management clearly said that actual contracts from this broader nuclear programme may start getting placed around 2027-28, because site identification, land acquisition, technology selection and approvals will take time. In simple terms, the nuclear story is not about a sudden revenue jump in the next one or two quarters. It is a long-term optionality.

There are also nearer-term nuclear opportunities. In Q3, management said NPCIL could come out with tenders for its PHWR programme, specifically Banswara and Chutka. It indicated that if these projects move in fleet mode, each order could be close to Rs. 8,000 crore to Rs. 9,000 crore, with civil works forming around 40 percent to 50 percent of the value. That is the part where HCC’s experience becomes relevant.

HCC is also trying to expand its footprint beyond civil work into allied areas such as mechanical, electrical and instrumentation works. If this happens, HCC’s addressable scope in nuclear projects could become larger than just civil construction. Management also indicated that nuclear projects, along with scale and quality of work, could support better margins over time.

Current Business Is Not Just Nuclear

Despite the nuclear excitement, HCC today remains a diversified infrastructure company. As of Q3FY26, its order backlog stood at Rs. 13,148 crore. Around 65 percent of the order book is from transport, 19 percent from hydro, 12 percent from water and 4 percent from nuclear and buildings. This means nuclear is strategically important, but it is still a small part of the current order book.

The company is currently executing or progressing on projects such as Patna Metro, Indore Metro, Vishnugad-Pipalkoti hydro project, Agardanda Creek Bridge, Tehri Pumped Storage and Bhivpuri Pumped Storage. In Q3FY26, HCC said Patna Metro packages 05 and 06 had been inaugurated by Bihar Chief Minister Nitish Kumar. Indore Metro piling work was underway at all five stations, while excavation was in progress at the Airport and Rajwada stations.

In hydro and pumped storage, the company reported progress at Vishnugad-Pipalkoti, where 8.5 km of the planned 12.1 km head race tunnel had been excavated using a tunnel boring machine. Work at Agardanda Creek, Tehri Pumped Storage and Bhivpuri Pumped Storage was also progressing in line with timelines.

HCC is also looking for opportunities in renewables, including nuclear and hydro, with hydro also covering pumped storage. Management also said it is seeing traction in minerals and metals and is working on a Hindalco-related project. It has also identified two overseas regions for possible medium-to-long-term work, but management clarified that this is not a shift away from India. The company wants to remain focused on its core engineering construction business.

Order Book And Growth Visibility

As per CARE Ratings, HCC’s total confirmed order book stood at Rs. 13,148 crore as of December 31, 2025, providing medium-term revenue visibility. The company in Q3 had secured two orders aggregating Rs. 1,478 crore in a joint venture from Northern Frontier Railways, where HCC holds a 65 percent stake. It was also the lowest bidder in projects worth Rs. 2,675 crore, with HCC’s share at Rs. 1,517 crore.

More importantly, HCC said it had bids submitted and under evaluation worth Rs. 35,765 crore, with HCC’s own share at Rs. 31,611 crore. This means the company has already bid for a large pool of projects, but those orders are not yet confirmed. It also has a bid pipeline of around Rs. 53,820 crore, which means these are future opportunities where HCC may participate.

Management has tried to set a clear growth ambition. In the earnings call, Arjun Dhawan said the company wants to see turnover doubling every three years. He also said that from such a low base, it would be disappointing if the company did not grow at 20-25 percent annually. However, this growth depends on converting bids into orders and then executing those projects smoothly.

There is also a discipline angle here. HCC lost the Dibang hydro bid, and management said some players had bid very aggressively. HCC said it continued to maintain bidding discipline after analysing the risks. This is important because for a company recovering from past stress, chasing low-margin risky orders just to grow the order book could be dangerous.

The Balance Sheet Repair Is Real

The strongest improvement in HCC’s story is on the balance sheet. CARE Ratings noted that HCC raised Rs. 1,000 crore through a rights issue in December 2025 and recovered Rs. 720 crore from arbitration awards through bank guarantees in FY26. These funds were used for working capital and debt repayment or prepayment.

As a result, debt reduced from Rs. 3,279 crore as of March 31, 2025 to Rs. 2,016 crore as of March 31, 2026, translating into a reduction of around 38 percent. In Q3FY26, the company had earlier said it had made Rs. 680 crore of prepayments in FY26 and planned another Rs. 876 crore repayment in Q4, which would take debt down to around Rs. 1,950 crore.

Another key improvement is the reduction in HCC’s corporate guarantee on debt of Prolific Resolution Private Limited. This guarantee was reduced from 100 percent to 20 percent, limiting HCC’s exposure to around Rs. 571 crore. CARE said this materially reduces contingent liability risk and strengthens HCC’s standalone credit profile.

However, the debt situation is not fully risk-free. CARE continues to say that HCC’s leverage remains elevated despite repayment. Total debt to PBILDT was high at 5.41 times in FY25 and is expected to moderate but remain elevated at around 3.5 times to 4 times in FY26. The company also has high receivables, disputed debtors and arbitration-linked claims. CARE noted that receivable days and gross current asset days were high in FY25, and the company does not have fund-based working capital limits, relying instead on customer advances and creditors.

Financial Performance: Recovery, But Revenue Still Weak

HCC’s Q3FY26 numbers show the mixed nature of the story. Standalone turnover stood at Rs. 921.8 crore compared with Rs. 1,002.1 crore in Q3FY25. This means revenue was still lower year-on-year. However, standalone net profit improved sharply to Rs. 85.9 crore, compared with a loss of Rs. 216.4 crore in the same quarter last year. EBITDA margin also improved to 15.2 percent from 14.7 percent.

CARE Ratings also noted that revenue moderated in FY25 and 9MFY26 because old projects were completed, new project awards were delayed, and several newly awarded projects were still in the early mobilisation stage. These projects are expected to gradually turn into revenue over the next two years as execution ramps up.

This is the key point. HCC is not yet showing a clean revenue growth cycle. The company is still in the transition phase where the balance sheet is improving, margins are better, and the order book is in place, but revenue acceleration has to follow.

What Is The Takeaway?

HCC is not a simple nuclear stock. It is a complex infrastructure turnaround stock with nuclear optionality. The company has a strong legacy in nuclear and hydro construction, a large order book, a meaningful bid pipeline and improving debt profile. Vanguard and Blackrock’s stake along with Mukul Agrawal’s increased holding add attention to the story, but the real test is operational.

The upside case is clear. If India’s nuclear roadmap gains momentum, HCC could be one of the few listed infrastructure names with the technical experience to benefit. If debt keeps falling, arbitration recoveries come in, and order execution improves, the company’s earnings profile can look much better than it did during the stressed years.

But the risks are equally clear. Revenue is still soft, debt is still not low, receivables remain stretched, working capital is tight, and execution has to ramp up. Nuclear orders may be large, but they will take time. The opportunity is real, but it is not instant.

In simple terms, HCC has moved from a stressed infrastructure company to a possible recovery and growth story. Its nuclear credentials make the story more interesting, especially with India’s LWR and 100 GW nuclear roadmap. But the company must prove that it can convert opportunities into orders, orders into revenue, and revenue into clean cash flow.

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