With an estimated average spend of upwards of Rs 1 trillion per annum (excluding land cost), the order book additions will remain healthy for both, large and mid-sized road contractors over the next four to five years.
Minimising of project execution risks and introduction of strong deterrents for non-performers are the only long-term solutions to ensure seamless funding for infrastructure projects, says Srishti Ahuja Taneja, Director, Transaction Advisory Services, Ernst & Young.
The Union Budget for fiscal 2018 has a progressive outlook and encourages investments with initiatives like affordable housing being given infrastructure status to avail new funding avenues. The Budget has expanded the scope for the capital and bond markets.
The company has been the biggest beneficiary of an uptick in orders in roads, due to its dual business exposure and access to Rs 14 billion of cash inflows over FY2016-18E. The company is targeting order inflow of Rs 40-50 billion in the roads segment and Rs 5-8 billion in the power segment.