New Delhi, March 30 India’s construction players are expected to witness a revenue growth of 6-8 per cent in 2026-27 after two bleak years, a report said on Monday.
Construction revenue growth is likely to remain muted in 2025-26 at 2 to 4 per cent, with increased pressure on road contractors, the report from ICRA said.
The shrinking order books for road contractors amid muted project awarding by the Ministry of Road Transport and Highways led to the muted growth.
Further, a slowdown in Jal Jeevan Mission‑related construction also played a part in the slowdown.
Road focused players are expected to witness pressure on their credit profiles, amid declining margins and muted revenue visibility but the diversified players are likely to benefit from continued investments in power, urban infrastructure and water (drinking and sanitation) segments, the ratings agency said, maintaining a ‘stable’ outlook on the construction sector.
Engineering, procurement and construction (EPC)) players focused on urban infrastructure projects, mining, power and irrigation sectors continued to witness a healthy growth. They are expected to see a revenue growth of 8-10 per cent in 2026-27.
Order inflows in 2025-26 benefited from higher awards in mining and water segments, recovery in road awarding remained gradual, with the ratings agency expecting a more meaningful pick-up from 2026-27.
Healthy budgetary capex and an improvement in execution will lead to the recovery, the report forecasted. Order inflows will likely expand by around 10 per cent in 2026-27, led by a recovery in the road sector awards and JJM projects, with the latter witnessing an extension in timeline till December 2028, with higher outlay.
EPC companies centred on West Asia will likely witness some pressure on execution momentum due to geopolitical challenges, according to Suprio Banerjee, Co-group Head, Corporate Ratings, ICRA.
The ratings agency estimated the operating profitability for construction companies to stay in the range of 10.3-10.8 per cent in 2025-26, and 10.1-10.6 per cent in 2026-27, owing to pressure on bitumen prices.
The price of the crude oil derivative rose due to geopolitical tensions in West Asia, and intense competition in the sector.
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