Farhan Qureshi (R. Madhavan) and Raju Rastogi (Sharman Joshi) begin their college year in the prestigious Imperial College of Engineering (ICE) in Delhi. They are joined by Ranchoddas Chanchad (Aamir Khan), known as "Rancho" as their roommate. While Farhan chose to pursue engineering over his passion for photography in order to appease his father, Raju has taken the course in order to lift his family from poverty. Rancho, on the other hand however, is genuinely interested in science and engineering. He however believes in hands on learning and tends to give unorthodox answers in class, coming into conflict with professors, in particular with the institution's director, Dr. Viru Sahastrabuddhe (Boman Irani), whom the ICE community nicknames as "Virus", and whose traditional and strict philosophies on education contrast sharply with Rancho's carefree love of learning. Meanwhile, Chatur, nicknamed “Silencer", is an arrogant Ugandan-born Tamilstudent with little knowledge of Hindi, who is obsessed with topping the exams.
Sometime later, the trio find that a student named Joy Lobo (Ali Fazal) hung himself; his suicide was caused by depression after Virus tells Joy's father that he will be unable to graduate due to the delay in his submission of an assignment. Joy had actually taken longer as he wanted to perfect his breakthrough drone design of a quad-copter. Rancho criticizes Virus' method of teaching and tries to show him how much pressure engineers face when they study, angering him further. Rancho visits his friends' families and later the trio then gatecrash a wedding to eat good food. They meet and befriend Pia (Kareena Kapoor), who turns out to be Virus' daughter and a residency student at the city's hospital. When Virus spots the trio, he summons Farhan and Raju on the next school day and threatens them of consequences of being friends with Rancho by comparing their family's income. He tells them that Rancho comes from a very rich family and does not need to worry about getting good grades and making a career. Affected, Raju moves out to Chatur's room. During the Teachers Day celebration, Chatur is humiliated when he delivers a Hindi speech modified by Rancho and as a result bets Rancho that ten years later, they would see who is more successful. Sometime later, Rancho saves Raju's dying father with the help of Pia. Raju reconciles with his friends while Pia falls in love with Rancho.
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