Most companies reiterated FY27 guidance, with margin normalisation expected from Q2FY27. The highways’ bid pipeline improved month-on-month (M-o-M) to Rs 1.4 trillion in July 2026 versus Rs 1.1 trillion in June 2026. NHAI’s bid pipeline is Rs 1.1 trillion, but awarding was weak at 3,100 kilometres versus the initial target of 4,500 kilometres.
India Ratings and Research (Ind-Ra) sees growth in toll revenue and anticipates an increase in hybrid annuity model (HAM) and build-operate-transfer (BOT) awards. NHAI plans to award around 27 per cent of the planned 5,140 kilometres under BOT modes. Toll collections at NHAI grew 14.4 per cent Y-o-Y in FY26.
About half of under-construction roads are facing delays of over 12 months. Competition intensity in NHAI HAM projects is moderating, given increased package size and tightening of net worth requirements. The bid project cost (BPC) per lane-km awarded has also improved.
There is continuing monetisation via the infrastructure investment trust (InvIT) route. InvITs have assets under management (AUM) of Rs 3.168 trillion (as of March 2026). NHAI has listed 17 assets, totalling 1,692 kilometres, that may be offered and expects road InvITs to reach Rs 6 trillion in AUM. Strong developers are monetising 80 per cent of completed projects.
Construction risks remain. An Ind-Ra analysis of 199 ongoing projects shows over 50 per cent of projects, with a total award cost of Rs 90,000 crore, are delayed. KEC (Rs 6,300 crore), HG Infra (Rs 5,600 crore) and KPIL (Rs 5,300 crore) reported good inflows, while GR Infra (nil) and Ahluwalia Contracts (Rs 500 crore) had slower inflows. Ebitda margins for KNR and HG Infra dropped 740 basis points and 530 basis points Y-o-Y, respectively. Ceigall and KPIL had margin expansion of 200 basis points and 40 basis points Y-o-Y, respectively.
KNR Constructions was under pressure. Adjusted for exceptional items, KNR recorded a loss of Rs 3 crore. PNC Infratech reported revenue including Rs 218 crore of contract revenue, and adjusted revenue was Rs 1,391 crore, while net profit declined to Rs 143 crore.
Power Mech Projects posted 25.5 per cent Y-o-Y revenue growth to Rs 1,620 crore in Q1FY27, though Ebitda fell 2.2 per cent Y-o-Y to Rs 170 crore, with margins down 290 basis points to 10.3 per cent on higher royalty costs, higher initial costs at KBP mine, and inflation due to West Asia geopolitics. Order inflows were Rs 1,860 crore in Q1 (15.5 per cent of the Rs 12,000 crore FY27 guidance target). The order backlog moved up to Rs 55,400 crore, which is nine times FY26 revenue, with an estimated Rs 25,500 crore-Rs 30,500 crore tender pipeline. The balance sheet shows net debt to equity of 0.06, with Rs 490 crore of cash. The management is looking for 50 basis points of annual margin expansion, moving to 14 per cent Ebitda margins by 2030.
VA Tech Wabag saw revenue rise 20.8 per cent Y-o-Y to Rs 887 crore. The EPC business grew 27 per cent Y-o-Y to Rs 726 crore, while operations and maintenance (O&M) grew 7 per cent Y-o-Y to Rs 159 crore. Ebitda, including a forex gain of Rs 36.8 crore, grew 21.7 per cent Y-o-Y to Rs 116 crore, with Ebitda margins of 13.1 per cent. Adjusted net profit grew 36.9 per cent Y-o-Y to Rs 90.1 crore. The order backlog was Rs 19,400 crore, with order intake of Rs 3,430 crore. The company maintains guidance of 15-20 per cent annual revenue growth, with 13-15 per cent Ebitda margins, return on capital employed (RoCE) of over 20 per cent, and return on equity (RoE) of over 15 per cent over the next 3-5 years.
PSP Projects saw revenue rise 65 per cent Y-o-Y, but margins were hit by labour shortages. Employee costs rose to 5.4 per cent of sales as headcount increased to 2,600. Management expects margin normalisation from Q2FY27 as utilisation improves. The Rs 13,250 crore order book is up 103 per cent Y-o-Y, with 70 per cent anchored by Adani projects.
J Kumar Infraprojects posted a 2 per cent Y-o-Y revenue rise to Rs 1,510 crore, with execution hit by temporary restrictions on potable water at sites and delays in land acquisition and approvals. The water issue has now been resolved. Ebitda fell 1 per cent Y-o-Y to Rs 210 crore, with margins at 14.2 per cent. Profit before tax and net profit slipped 4 per cent and 6 per cent Y-o-Y, respectively. The company reiterated FY27 guidance of Rs 6,500 crore in revenue, with 14.5 per cent Ebitda margins and order inflows of Rs 8,000 crore-Rs 10,000 crore.
The overall outlook for road infrastructure is cautiously optimistic. Execution has been slow, but the big tender pipeline promises a pickup in activity. Diversified companies have seen more activity.
