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Revenue of road EPC companies to degrow 8-10% this fiscal

By IANS | Updated: June 23, 2020 21:15 IST

New Delhi, June 23 Revenue of road-building engineering, procurement and construction companies is expected to degrow by 8-10 ...

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New Delhi, June 23 Revenue of road-building engineering, procurement and construction companies is expected to degrow by 8-10 per cent this fiscal, Crisil Ratings said on Tuesday.

Accordingly, the rating agency cited Covid-19 pandemic-driven lockdowns for severely curtailing activity of road-building EPC players.

In contrast, to the expected slide in FY21 revenue, an analysis of over 300 Crisil-rated EPC companies with rated debt of Rs 51,000 crore showed a 17 per cent growth between fiscals 2017 and 2020.

The rating agency said the revenue growth was expected to taper to some extent due to lower contract awarding by the National Highways Authority of India (NHAI) in the last two fiscals.

However, this fiscal, the slowdown in execution due to lockdowns and the resultant labour shortage is expected to push revenue growth into negative territory.

Sachin Gupta, Senior Director, Crisil Ratings, said: "Typically, in EPC projects, maximum execution and billing is done in March. However, the lockdown that began from March 22, halted work in the crucial last days of the last fiscal and has continued to do so this fiscal."

"The pick-up in execution and mobilisation after the lifting of the lockdown will be gradual. The upshot would be revenue degrowing 8-10 per cent and margins for EPC companies being hit by 200 bps in fiscal 2021."

( With inputs from IANS )

Tags: EPCCrisil RatingsSachin Gupta
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