Revenue of large, diversified EPC companies to grow 9-11% in FY26: Crisil

Crisil said revenue growth of EPC companies will be supported by robust order books, higher infrastructure spending and improved order mix, with margins set to expand

Large, diversified engineering, procurement and construction (EPC) companies are expected to see revenue growth of 9-11 per cent in FY26, slightly higher than the 8.3 per cent growth reported in FY25, according to a report by Crisil.

 

The growth will be supported by steady infrastructure capital expenditure (capex), strong order books, faster project execution and a favourable order mix.

 

Revenue growth, which averaged 20 per cent CAGR during fiscals 2022-24, moderated to 8.3 per cent in FY25 on a high base, in line with the 6 per cent growth in domestic infrastructure capex. Capex is projected to rise 7-9 per cent in FY26, aided by sustained central and state budgetary allocations and moderate private sector participation.

 

 

Private sector role expanding 

Private sector contribution to overall infrastructure capex remained modest at 9 per cent in FY25, but is expected to increase to 11 per cent in FY26, driven by renewed build-operate-transfer (BOT) projects in roads and higher renewable energy investments.

 

Crisil’s analysis of 15 EPC companies, with combined annual revenue of ₹3.15 lakh crore in FY25, showed that sector performance is closely linked to public and private capex, with infrastructure alone accounting for 75 per cent of India’s total capex. Some EPC firms have also expanded abroad to capture opportunities in diverse infrastructure segments.

 

Order books and profitability 

Order books remain robust, with the order book-to-revenue ratio improving to 3.7 times in March 2025 from 3.5 times a year earlier. Overseas orders rose to 27 per cent of total order books, compared with 23 per cent in March 2024 and just 16 per cent five years ago.

 

Profitability is expected to benefit from a healthier order mix, completion of legacy projects, stable commodity prices and rupee depreciation. Operating margins are projected to expand by about 50 basis points to 9.5 per cent in FY26, despite competitive pressures.

 

Risks flagged by Crisil 

The agency cautioned, however, that any underspending on budgeted capex or sharp volatility in commodity prices due to geopolitical tensions could weigh on the sector’s performance.