ICRA has projected that road execution activity is likely grow 16-21 per cent to 12,000-12,500 km in FY24 due to the healthy pipeline of projects, increased capital outlay by the Centre and focus on project completions ahead of the general elections.

ICRA projects the toll collection growth to be 6-9 per cent in FY24, primarily supported by a 4-5 per cent growth in traffic.

Giving more insights, Vinay Kumar G, Sector Head, Corporate Ratings, ICRA, said: “The execution was impacted in H1 FY23 on account of elevated commodity prices as well as prolonged monsoons in certain geographies affecting the productive days. The situation improved in H2 FY23 with road construction witnessing a y-o-y growth of 2 per cent, thereby containing the overall decline at 1 per cent in FY23 (to 10,331 km from 10,457 km in FY2022).”

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The project pipeline remains strong at 55,000 km under various stages of execution. This, along with a focus on project completions ahead of general elections, is expected to boost execution to 12,000-12,500 km in FY24.

“With the model code of conduct in place during Q4 FY24 (Q4 typically accounts for 50-60 per cent of awards in a year), ahead of the general elections, the awarding activity is likely to be impacted in FY24 and the overall awards are expected to decline to 9,000-9,500 km from 12,375 km in FY2023. The EPC will continue to remain the mainstay of awarding accounting for 70-75 per cent of awards in FY24. The BOT-toll awards accounted for less than 5 per cent of the orders in the last five years, and its share is expected to remain at similar levels in FY24,” he added.

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