ICRA anticipates a significant rise in road construction activity of 16-21% to 12,000-12,500 km in FY24 due to a strong project pipeline, increased government capital spending, and an emphasis on project completions in advance of the general elections. ICRA estimates that in FY24, toll revenue will increase by 6-9%, mostly due to a 4-5% increase in traffic. Due to elevated commodity costs and protracted monsoons in some regions, which reduced the number of productive days, the execution suffered in H1 FY2023. According to Vinay Kumar G, Sector Head, Corporate Ratings, ICRA, the situation improved in H2 FY2023 with road construction recording a YoY growth of 2%, hence keeping the overall decline at 1% in FY2023 (to 10,331 km from 10,457 km in FY2022). With 55,000 km of projects in various levels of completion, the pipeline of projects is still strong. This will increase execution to 12,000-12,500 km in FY2024, along with an emphasis on project completions before general elections. Prior to the general elections, the model code of conduct will be in effect during Q4 of FY2024 (Q4 normally accounts for 50-60% of awards in a year). As a result, the awarding activity in FY2024 is likely to be influenced, and the total awards are predicted to fall from 12,375 km in FY2023, to 9,000-9,500 km. In FY2024, awards made under the EPC will still account for 70%–75% of all awards. Less than 5% of the orders over the previous five years came through BOT-Toll awards, and the percentage is anticipated to be the same in FY2024. While the bid competitive intensity for EPC projects remained high, it is noteworthy that in FY2023, this trend also caught up with the HAM projects, with nearly 40% of the HAM bids coming in below the authority bid price. From values exceeding 20% in FY2019 to FY2021, the median premium dropped to 15% in FY2022 and 4% on FY2023, respectively. The inflation-linked toll hike is only 1.3-5% in FY2024, which is relatively low given the lowering WPI inflation. As a result, it is predicted that toll revenue will increase by 6% to 9% in FY2024, largely due to a 4-5% increase in traffic. Despite the slowing in toll collection growth, the debt coverage metrics for BOT toll road assets should be supported by lower outlays for O&M and major maintenance due to recent moderation in key commodity prices, especially bitumen. For FY2024, ICRA's outlook on toll roads is unchanged, he continued.