Construction Industry Poised for Recovery, ICRA Projects
New Delhi, March 30 – India’s construction industry is projected to experience revenue growth in the coming years, according to a report released by ICRA. The sector is expected to see a 6-8% revenue increase in 2026-27 following two challenging years.2025-26 Outlook: Modest Growth and Road Contractor Challenges
Revenue growth in the construction sector is anticipated to remain modest at 2-4% in 2025-26. Increased pressure on road contractors is a key factor, driven by a slowdown in order bookings and muted project awards from the Ministry of Road Transport and Highways. A slowdown in construction related to the Jal Jeevan Mission also contributed to the overall subdued growth.Diversified Players to Benefit
Construction companies focused on road infrastructure are expected to face challenges regarding their credit profiles, amid declining margins and limited revenue visibility. However, diversified players are projected to benefit from continued investments in power, urban infrastructure, and water segments including drinking and sanitation.2026-27 Forecast: Growth Driven by Infrastructure and JJM
Engineering, procurement, and construction (EPC) companies focused on urban infrastructure projects, mining, power, and irrigation sectors are expected to witness revenue growth of 8-10% in 2026-27. Order inflows in 2025-26 benefited from higher awards in the mining and water segments, with a gradual recovery in road awards expected in 2026-27. Healthy budgetary expenditure and improved execution are forecasted to lead to a recovery, with order inflows potentially expanding by around 10% in 2026-27, driven by a recovery in road sector awards and Jal Jeevan Mission (JJM) projects. The Jal Jeevan Mission timeline has been extended until December 2028, with higher allocations.EPC Companies in West Asia Face Potential Headwinds
EPC companies centered on West Asia are likely to experience some pressure on their execution momentum due to geopolitical challenges, according to Suprio Banerjee, Co-group Head, Corporate Ratings, ICRA.Profitability Estimates
The ratings agency estimates operating profitability for construction companies to remain in the range of 10.3-10.8% in 2025-26, and 10.1-10.6% in 2026-27, influenced by pressure on bitumen prices. The price of the crude oil derivative has risen due to geopolitical tensions in West Asia and intense competition in the sector.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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