Construction sector revenues are expected to grow at a stable 6–8% in FY2027, supported by an adequate aggregate order book that is likely to remain above 4.2x of operating income. Improving execution momentum after muted growth in FY2026, especially due to slowdown in road construction, is also a support.

While overall credit metrics are likely to remain stable, diversified EPC players are better positioned by their broader segment mix and stronger order books.

• Construction Gross Value Added (GVA) growth is projected to drop to 6.5% in FY2027 from 7.4% in FY2026 Provisional Estimates (PE), with risks tilted to the downside amid the West Asia conflict. In FY2026, the GVA improved to 8.4% in Q4 from 6.7% a quarter earlier, with the National Statistical Office (NSO) raising the YoY FY2026 PE to 7.4% over 7.3% in FY2025.
• For FY2027, the order book-to-bill ratio is estimated at 4.2-4.4 times, underpinned by sustained order inflows and diversification beyond roads. The operating income for ICRA’s sample set of entities is expected to grow by 6-8% largely driven by a healthy order book and budgetary support by the Government after remaining flat in FY2026. Revenue slowed down in FY2026 reflecting reduced construction activity owing to an early and elongated monsoon along with slower awarding and execution activities.

Note : Budgetary allocation under various construction intensive ministries and schemes have been classified under different segments

Source: MoRTH, MoR, MoRD, MoHUA, MCA, MoSPW, ICRA Research