Order rebound could lead to uptick for road infrastructure players

There may be an ongoing slowdown in the roads sector. Road construction companies working in the engineering procurement and construction (EPC) mode had weak execution in the second quarter of the 2022-23 financial year (Q2FY23), being affected by lower backlogs and heavy monsoons.

Diversified players like L&T, KEC and NCC did better. On the whole, debt and net working capital levels improved for the segment but there were exceptions. The Q2 order inflows were low or nil for road developers. The National Highways Authority of India (NHAI) award of road contracts was weak in the first half (H1) of FY23.

During H1, NHAI awarded only 35 projects with length 1,024 kilometres (km) worth Rs 19,100 crore (this includes 386 km