EPC Sector's Growth Prospects Amidst Political Challenges
Engineering, procurement and construction companies are projected to experience mid-to-high single-digit revenue growth with stable margins this financial year. Despite a strong start to FY26 being unlikely due to past election impacts, there is potential for recovery if robust orders from transport authorities materialize.
- Country:
- India
Engineering, procurement and construction (EPC) companies are anticipated to achieve mid-to-high single-digit revenue growth coupled with largely stable margins in the current financial year, as reported by India Ratings and Research (Ind-Ra) on Monday.
Despite an undemanding base effect from FY25—when revenues fell by 4-5 percent due to prolonged election season impacts—EPC companies have sustained a revenue increase of 5 percent y-o-y in the first quarter of the present fiscal year. This marks the fifth continuous quarter of single-digit revenue growth for the sector.
However, Krishan Binani, Director of Corporate Ratings at Ind-Ra, noted that expectations for a robust start to FY26 remain unmet. Companies projected an aggregate revenue growth rate of 12.7 percent y-o-y, slightly below previous guidance. This outlook heavily relies on a potential second-half recovery fueled by a significant pipeline of projects worth Rs 3.5 trillion from the Ministry of Road Transport and Highway/National Highway Authority of India set to be awarded in FY26.
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