New Delhi, June 3 (IANS) The income of India’s emerging diverse construction companies may increase by 9-11 percent in the current financial year. This information was given on Tuesday in a new report.
The data compiled by Crisil Ratings informed that the average annual income of these companies has increased by about 15 percent in the last five years.
Senior Director of Crisil rating, Rahul Guha said that the government is focusing on the infrastructure and supporting the development of a better access to funding.
Guha said that the profits of these companies will remain flat on an annual basis, as competition within this segment is getting intensified.
Himank Sharma, director of Crisil rating, said that these companies are investing in equipment and are facing high working capital needs, but their balance sheet remains strong and credit profiles are stable.
The report stated that a healthy pipeline of development projects remains and orders are being extended on time by companies, which have helped companies to create a strong track record and expand their operations.
Crisil has analyzed about 200 such companies in this report that have earned around 1 lakh crore rupees in the previous financial year, which is about 10 percent of India’s total infrastructure expenses.
The order books of these companies remain strong, which is almost double the size of their expected revenue for FY 2025 with backlog.
Orders of these companies are spread over several sectors, including civil construction and urban infrastructure (40 percent), roads (34 percent), railway (12 percent), and water projects (10 percent).
The report said that this diversification is helping companies to reduce their dependence on any one area, especially at a time when the New Road Project Awards have slowed down.
Companies in the road sector have increased their presence in both engineering, procurement and construction (EPC) and Hybrid Anuity Model (HAM) projects in the last two years.
At the same time, more government expenditure on railway, buildings and urban development projects has provided new development opportunities and has helped to balance its project portfolio.
-IANS
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