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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