• Report
  • Construction Materials
  • Premium
  • National And State Highways
  • Construction
  • Transportation Infrastructure
September 01, 2019

Sector Report: Roads and Highways

This report is available to users in India for ₹40,000 + applicable taxes


Table of Contents


  • Summary
  • National highways
  • State roads
  • Rural roads
  • Public funding
  • Private funding
  • Profitability
  • Competition
  • Methodology


Awarding set to gain pace in fiscal 2020; moderate over the medium term


CRISIL Research projects NHAI awarding to be around 4,300-4,700 km in fiscal 2020, after a slump in fiscal 2019, because of a strong pipeline of projects under Bharatmala. Based on our analysis of tenders floated by NHAI up to June 2019, there are are ~6,000 km of tenders unawarded. NHAI awarded only 2,200 km of highway projects in fiscal 2019, down from a high of ~7,400 km in fiscal 2018, because of financial constraints and delays in land acquisitions. As we have seen historically, awarding typically picks up in the year after the general elections.


About 75-80% of HAM projects, in terms of km, of key players such as Dilip Buildcon, Ashoka Buildcon, IRB Infra, Sadbhav, Welspun, KNR and PNC awarded between fiscals 2016 and 2018, have now received appointed dates. These players account for 50% of total HAM awarding during this time.


Over the medium term, that is between fiscals 2020 and 2024, CRISIL Research forecasts that awarding will be stable at 4,000-4,300 km per year. Future awarding would be linked to NHAIs ability to raise funds, as it would focus on execution of already awarded projects.


Awarding under the Bharatmala Pariyojna (BMP) has begun from fiscal 2018 and CRISIL forecasts that awarding of phase 1 of BMP will stretch at least until fiscal 2024; NHDP awarding will phase out by fiscal 2021. ~450 kms of projects under Bharatmala were awarded in Q1FY2020.


In FY2019, 60% of projects awarded were EPC and only 40% were HAM. This trend may continue going forward as the balance sheets key players in the HAM space are stretched at leverage of ~3x. Currently, most HAM players are looking to sell their equity stake in operational as well as under-construction projects, including newly awarded HAM projects. If this trend of selling their equity stake in under-construction projects continues, giving eligible players the bandwidth to bid for new projects, the share of HAM projects in future could increase.


MoRTH awarding including NHIDCL, too, slowed to ~3,250 kms in fiscal 2019 from a high of ~9,650 kms the year before. MoRTH also foscused on clearing backlog of projects already awarded & tackle road blocks in construction.