A report by Nuvama said that road project awards by the National Highways Authority of India are unlikely to recover meaningfully in FY27 because the authority's capital expenditure budget has not increased. The assessment indicated that a flat capex envelope will constrain fresh awards and limit momentum across the road sector.

The report noted that awards have been weak for several years and that NHAI missed its FY26 target of awarding around 4,500 km of highway projects. Nuvama attributed the slowdown to delays in project appraisal and approval and to limited private sector interest in build-operate-transfer projects. These factors were said to have contributed to the shortfall in full-year awards.

Award values remained well below earlier peaks, with the authority's award value at Rs 470 billion (Rs 470 bn) in FY25 compared with Rs 350 billion (Rs 350 bn) in FY24 and about Rs 1.5 trillion (Rs 1.5 tn) in FY22 and Rs 1.3 trillion (Rs 1.3 tn) in FY23. The FY27 road sector capex budget at Rs 2.9 billion (Rs 2.9 bn) represented an increase of eight per cent year-on-year against FY26 estimates after being flat for two consecutive years. In this context, Nuvama judged a meaningful rebound to be unlikely.

Activity in recent months remained subdued, with the authority awarding only around five km of projects in June 2026 after awarding 102 km in May 2026 and 13 km in June 2025. Road construction in June fell by 32 per cent year-on-year to 274 km, while construction in the first two months of FY27 stood at around 638 km, down 34 per cent from a year earlier. The report linked muted awards directly to lower construction activity.

For the full year FY26, NHAI awarded projects spanning 3,124 km, down 22 per cent year-on-year, while constructing 5,313 km, down five per cent. The report said the government decision to pause new awards under the Bharatmala programme weighed on award volumes and noted that the share of listed developers in NHAI awards has declined from about 61 per cent in FY16-FY18 to around 31 per cent in FY19-FY21 and nearly 25 per cent in FY22-FY26. Nuvama added that muted awards had already weighed on construction, which fell about 15 per cent in FY25.