Improving signals for road sector companies with 25% budget boost for FY24

Given high competition, firms with ability to monetise projects, focus on high margin assets and healthy balance sheets are preferred plays

The Budget for FY24 has increased road outlay by 25 per cent year-on-year, invigorating stakeholders in the roads sector. However, unseasonal rains have led to reduced activity, and the volume of awarded projects has also declined.

Year-to-date awards for FY24 stand at 1,756 km, a decrease from 2,706 km during the same period in FY23. These awards have predominantly been led by the Ministry of Road Transport and Highways (MoRTH), as the National Highways Authority of India (NHAI) has contributed just 10 per cent to the total. By comparison, total road awards in FY23 amounted to 12,375 km, with NHAI