Construction

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In the last couple of years, the construction industry showed a dismal performance on account of the economic slowdown. Amid the challenging economic environment, order inflows to the construction industry were muted. Project execution was affected due to the delay in getting land acquisition and environment clearances. Also, political uncertainty, deteriorating financial conditions added to the problems of construction companies. The multiple of order backlog to sales reached a level of 3 times by the end of FY13. Eventhough, the multiple of order backlog to sales at the end of FY13 indicates the decent revenue visibility, the revenue growth of the industry will be dependent on the project execution.The revenue growth of the construction industry is expected to drop marginally on a YoY basis in FY14 amid the persistent execution and liquidity concerns. Moreover, increased borrowings and high interest rates will continue to hit the bottom line of the industry. However, growing emphasis of the government on strengthening infrastructure in the 12th Five Year Plan is expected to throw a sizable opportunity for the construction industry.

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Updates

    • Quarterly Update Jun-14

      The construction component of GDP grew marginally by 0.7% on a YoY basis in Q4FY14....

    • Quarterly Update Mar-14

      The construction component of GDP grew marginally by 0.6% on a YoY basis in Q3FY14....

    • Quarterly Update Dec-13

      The construction component of GDP registered a growth of 4.3% on a YoY basis in Q2FY14....

    • Quarterly Update Sep-13

      Continued impediments in the sector and overall economic slowdown affected the growth in Q1FY14....

    • Quarterly Update Jun-13

      Margins continued to remain under pressure in Q4 FY13 on a YoY basis....

    • Quarterly Update Mar-13

    • Quarterly Update Dec-12

Impact Analysis

  • Revenue growth to remain muted in the near term...

    In FY13, the construction industry continued its sluggish performance......

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  • Massive investment planned but realization seems a herculean task...

    Investment in the infrastructure sector plays a crucial role in the growth of the economy. In the past few years, the sustained growth of the Indian e.....

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