Road contractors eye tender boost in the second half of FY26

Copyright © HT Digital Streams Limit all rights reserved. The road contractors are a boost in the second half of FY26 after two lean years in both FY22 and FY23, awarded the Nhai contracts of more than 12,000 km. (Bloomberg) Summary affected by the slowdown of orders, most engineering, procurement and construction companies have seen a decline in their financial performance over the past few years. Mumbai: After a prolonged slowdown in orders, India’s giants of the road building kept their fingers crossed for a long -awaited revival. With the National Highway Authority of India (NHAI) highway contracts that dry up over the past two years, engineering, procurement and construction firms (EPC) firms specialize in roads see that revenue strikes and margins. Now players and experts in the industry are keeping their eyes on the second half of FY26, and expects a collection in highway tenders. The leading EPC firms with a significant focus on roads include IRB Infrastructure Developers Ltd, Ashoka Buildcon Ltd, HG Infra Engineering Ltd, Hindustan Construction Construction Company Ltd (HCC), and Dilip Build Buildcon Ltd. In both FY22 and FY23, the Nhai awarded contracts that were more than 12,000 km. It delayed to 8,000-8.500 km in FY24 and FY25, according to estimates of crisil ratings. It usually takes about 12-18 months after a contract has been awarded for the start of the construction and that the contractor can begin to record the income. According to Anand Kulkarni, director of Crisil Ratings, the number of contracts awarded in the first half of FY26 is also subdued. “But we expect a meaningful bakkie in the second half, especially in the third quarter, which is usually the busiest period,” he said. “After a few years of subdued award, this fiscal should see some improvement, so all eyes will be how the second half comes out.” Kulkarni added that any improvement in awards this year is likely to reflect in the second half of FY27 or in FY28. New views to compensate the impact on profitability have diversified several businesses to other areas. Kulkarni estimates that the road-directed EPC firms now get a third of their order book from non-road sectors-from about 10-12% five years ago. For example, Bhopal-headed Dilip Build Buildcon, which started diversifying three years ago, now has eight other vertical enterprise-inclusive operating mines, subway and railway construction, irrigation, water distribution and tunnel. It has also recently dared to lay optical fiber for broadband connection and construct solar plants. Nevertheless, the company saw its order book shrinking more than £ 25,000 in FY22 and FY23 to £ 13,695 crore on June 30, 2025. The revenue for the April-Junie quarter dropped from 16% year-on-year to £ 2,620 crore. However, the profit almost doubled to £ 271, thanks to the attempt at newer segments. “We are adversely affected by a slow order of activities by Nhai,” a Dilip Buildcon spokeswoman said in ‘Ne -mail, adding that the company expected orders of £ 60,000 from the highway authority in the second half of FY26. “Since we expect good order intake in the second half of this year, we should see much better performance next year,” the spokesman said. Performance affected by the slowdown of orders, most EPC businesses have seen a fall in their financial performance over the past few years. Data from the latest investor offer showed that the Nashik-based Ashok buildcon drops its turnover and profit by 30% and 25% year-on-year in Q1FY26 to £ 1.339 crore and £ 31 crore respectively. Jaipur headquarters HG Infra Engineering also reported a decrease in both turnover (3%) and profit (39%). For Mumbai-based HCC, the Q1 turnover year-on-year was 40% lower at £ 1.091 crore. However, there is a profit of £ 51 crore compared to a loss of £ 3 a year before. IRB infrastructure in Mumbai was the only one among its peers to grow in turnover and profit by 10% and 45% respectively. These companies did not respond to Mint’s request for comment. Crisil’s Kulkarni, who has shown a greater competition in the sector over the past few years, said several middle-sized EPC businesses are in a good place because they have secured a significant number of projects. “We expect the middle-sized EPC firms to produce a moderate growth of about 5-7% this fiscal,” Kulkarni said. “However, the big road-focused EPC players will see the stagnation of income.” Catch all the industry news, bank news and updates on live currency. Download the Mint News app to get daily market updates. More Topics #nhai Read Next Story