The GoI continues to advance an expansive infrastructure agenda, reflected in the sharp scaling-up of capital outlay across key infrastructure sectors. The Ministry of Road Transport and Highways (MoRTH) continued to account for the largest share of overall capital outlay in the Union Budget 2026–27 (BE); however, its share is on a declining trajectory which coupled with awarding restrictions and land acquisition issues has led to lower awarding and resulted in heightened competition and shrinking order-book position for road-focused entities. This has resulted in modest revenue growth, translating into weakening margin performance in the recent years. With the phasing out of Atmanirbhar Bharat relief measures, the interest coverage ratios of road-focused EPC players have been worsening with elongated working capital cycles and rising borrowing dependence.

Diversified EPC companies, on the other hand, have maintained strong, broad-based order inflows and superior revenue visibility, supported by Government-funded programmes across water supply, railways, metros, and urban infrastructure. The healthy order book position resulted in higher revenue growth, steadier margins and more resilient interest-coverage trends, enabling stronger financial stability than their road-focused peers.

Source: ICRA Research