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. Overall execution momentum is expected to improve in FY2027 following the subdued growth witnessed in FY2026, particularly in the roads segment.

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

• Construction gross value added (GVA) growth is estimated to remain between 7.0-7.5% in FY2027 from 7.2% in FY2026 (Provisional Estimates; PE), supported by continued demand from housing and infrastructure activities and healthy order book of players. The YoY growth in construction GVA eased to a lower-than-expected 7.7% in Q1 FY2027 from 8.7% in Q4 FY2026, albeit remaining healthy.
• 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