Construction order book to get Rs 90K-cr boost by Metro growth

Growth of Metro Rail network in new cities is expected to boost the order book of construction companies by up to Rs 90,000 crore over the next three to five years, rating agency ICRA said today.
"Development of Metro Rail is being planned in over 30 Indian cities...In addition, new network is to be developed in another 15-20 cities...This is expected to boost the order book of construction companies by Rs 75,000-90,000 crore over the next three to five years," ICRA said in a statement.
It said Metro Rail sector has seen strong traction in the last couple of years and is expected to provide sizeable opportunities for construction companies due to strong pipeline of projects which are in approval or planning stage.

Currently, Metro Rail network is operational/ partly operational in nine cities and another five cities have under-implementation metro projects.
The rating agency said the overall cost of expansion of operational/ under implementation approved Metro projects is over Rs 2.5 lakh crore, thus supporting the order books of construction contractors.
Further, Metro Rail projects worth another Rs two lakh crore are in various stages of approvals and are likely to come up for bidding within next five years, it said.
"Roads and urban infrastructure, including metro rails are two key segments which have witnessed robust order inflows for the construction companies.

"Further, with sizeable pipeline of projects in these segments, the construction sector is expected to have sufficient order inflows and companies with strong track record and healthy balance sheet are expected to exhibit strong growth going forward," said K Ravichandran, Senior Vice-President and Group-Head, Corporate Ratings, ICRA.