Roads, power, railways to drive near-term business tendering momentum: Ind-Ra
₹3,383.5 billion, signifying the impetus shown by the central and state governments in increasing the order inflow. Healthy growth in tendering is seen from the Indian Railways.
The report said that of the overall order awards in 1QFY24, 55% of the orders were from railways (including metros) (38%) and roadways (17%). Awards in the mining segment grew 495% YoY in 1QFY24.
On absolute basis, the orders awarded grew to ₹1,512 billion in 1QFY24 from ₹1,196 billion a year ago, driven by significant tenders announced during 2HFY23 ( ₹7,661 billion). According the ratings agency, based on the incremental allocations in the Union Budget, the government’s thrust on the EPC sector would continue in FY24.
Ind-Ra has maintained a neutral outlook on the construction sector for FY24, while revising the sub-sector outlook for roads EPC to neutral from negative. The neutral sector outlook reflects the agency’s expectation of EPC players posting a healthy performance in FY24, driven by an accelerated execution of the growing order book, a modest rebound in the operating margins and adequate liquidity.
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