New Delhi, January 1 (IANS). India’s construction sector is expected to see an income growth of 8 to 10 percent in FY 2026-27, which is considered slightly better than the estimated 6 to 8 percent in FY 2026. This information has come to light in the report of rating agency ICRA released on Thursday.
Rating agency ICRA has maintained its outlook for the Indian construction sector at ‘stable’. This means that the situation in this region is expected to remain balanced in the coming times.
ICRA Vice President and Co-Group Head Supriyo Banerjee said that the performance of construction companies working on roads may remain somewhat weak. At the same time, the growth of companies working in urban infrastructure, irrigation projects and energy sector is likely to be good.
It was told in the report that the financial condition of construction companies which work in different sectors will be better. But, companies which are dependent only on road construction or Jal Jeevan Mission may face some difficulties in the near future.
The gross economic growth (GVA) of the construction sector is estimated to decline to 6.5 to 7.5 percent in fiscal year 2026. This increase was 9.4 percent in fiscal year 2025.
The growth of the construction sector in the second quarter of FY 2026 was 7.2 percent, which was slightly lower than 7.6 percent in the first quarter. Still, it remained above 7 percent for the 12th consecutive quarter.
As of September 30, 2025, the order book-to-billing ratio based on FY2025 operating income was around 3.7x, maintaining a satisfactory level. This means that there is a possibility of increase in the income of companies in the coming time.
Competition in this sector is high, yet companies’ profit levels are expected to remain stable. Profit in FY 2026 and FY 2027 may be between 10.3 to 10.8 percent. The reason for this is stable prices of raw materials and better management of work.
ICRA believes that the cash management cycle of construction companies in FY 2026 will remain the same as in 2025.
–IANS
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