India's Fastest Growing Construction Companies 2013
ROADS & HIGHWAYS

India's Fastest Growing Construction Companies 2013

The Indian construction industry holds promise of enormous growth potential on account of rapid industrialisation and economic development arising from the rising public expectation of an improved quality of life. However, India´s economic growth slowed down in 2012-2013 to 5.1 per cent, the lowest in a decade, owing to the global economic slowdown, inadequate infrastructure, sluggish investment growth and policy paralysis. The decline in the construction sector, the second largest after agriculture, contributed to a growth rate of only over 5 per cent as against 8 per cent in 2011-12. The poor showing of the sector in the 2012-2013 period was reflected in the form of a slowdown in the execution of projects and lack of order inflows. This has been seen particularly in the roads sector with awards from NHAI sharply declining due to issues related to land acquisition, environmental clearance and unsettled dues coupled with lack of interest from players for unviable BOT projects.

Performance in construction sectors like thermal and hydro power, industrial, railways and bridges also continued to be lacklustre though some traction was seen in buildings, water supply and urban infrastructure segments. A major plus has been that the government has now initiated steps to revive the construction sector through reforms like the Land Acquisition Bill, the delinking of forest and environment clearance and working on modalities to provide exits. The latter day urgency shown by the UPA government in giving a push for projects is expected to boost the construction sector´s performance marginally in 2013-2014. Further, with the possibility of global economic recovery coupled with positivity in business sentiment, GDP growth is expected to improve in the coming year. Going forward, increase in FDI, a revival in order inflow across construction sector segments, a decline in leverage ratio and interest rates with improvements in capital cycle will hold the key to future growth.

The Indian construction industry holds promise of enormous growth potential on account of rapid industrialisation and economic development arising from the rising public expectation of an improved quality of life. However, India´s economic growth slowed down in 2012-2013 to 5.1 per cent, the lowest in a decade, owing to the global economic slowdown, inadequate infrastructure, sluggish investment growth and policy paralysis. The decline in the construction sector, the second largest after agriculture, contributed to a growth rate of only over 5 per cent as against 8 per cent in 2011-12. The poor showing of the sector in the 2012-2013 period was reflected in the form of a slowdown in the execution of projects and lack of order inflows. This has been seen particularly in the roads sector with awards from NHAI sharply declining due to issues related to land acquisition, environmental clearance and unsettled dues coupled with lack of interest from players for unviable BOT projects. Performance in construction sectors like thermal and hydro power, industrial, railways and bridges also continued to be lacklustre though some traction was seen in buildings, water supply and urban infrastructure segments. A major plus has been that the government has now initiated steps to revive the construction sector through reforms like the Land Acquisition Bill, the delinking of forest and environment clearance and working on modalities to provide exits. The latter day urgency shown by the UPA government in giving a push for projects is expected to boost the construction sector´s performance marginally in 2013-2014. Further, with the possibility of global economic recovery coupled with positivity in business sentiment, GDP growth is expected to improve in the coming year. Going forward, increase in FDI, a revival in order inflow across construction sector segments, a decline in leverage ratio and interest rates with improvements in capital cycle will hold the key to future growth.

Related Stories

Gold Stories

Hi There!

Now get regular updates from CW Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Construction News on Whatsapp! Enjoy

+91 81086 03000

Join us Telegram