NHAI Awards Fall to Seven Year Low as Focus Shifts to Debt Repayment

03 Jul 2026 CW Team

When state-level awards are included, combined NHAI?plus?MoRTH awards in FY26 totalled 7,000 km, down from 7,538 km in FY25, a seven per cent year-on-year fall and far short of the more than 12,000 km awarded across FY22–23. Overall road construction declined 12 per cent year on year in FY26, after a 14 per cent fall in FY25. The report highlights persistent land acquisition delays that are lagging the pace of approvals.

The slowdown has structural implications for the commercial vehicle and construction equipment supply chain that supports highway building. Nuvama highlighted that listed developers' share of NHAI awards has shrunk from roughly 61 per cent in FY16–18 to 31 per cent in FY19–21 and to 25 per cent over FY22–25, with the share remaining at 25 per cent in FY26. Smaller unlisted players have been winning a larger slice of available work, reducing revenue visibility for listed firms.

NHAI's capital expenditure was roughly flat at Rs 2.4 trillion (Rs 2.4 tn) in FY26 while the agency's construction output fell about five per cent to 5,313 km, indicating a reallocation of funds. Asset monetisation raised around Rs 283 bn in FY26, slightly below earlier levels, and much of the proceeds is funding debt repayment as the debt to equity ratio fell to 0.17 times.

With a muted FY27 road outlay and the agency prioritising deleveraging over expansion, a near-term pickup in awards appears unlikely, the note suggested. Nuvama advised road developers to pursue segmental diversification as their ability to secure orders at desired margins is under question. The brokerage said it remained cautious on the roads sector given the subdued project pipeline and potential knock-on effects for allied industries.

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Road building in India slowed sharply in the fiscal year ended March 2026 as national highway awards fell to their weakest level in seven years and construction activity returned to a level not seen since FY17, an analysis by Nuvama Institutional Equities found. The National Highways Authority of India awarded contracts for 3,124 km of road projects worth Rs 423 billion (Rs 423 bn) in FY26, up from 2,170 km worth Rs 470 bn in FY25 but well below the 6,300 km and nearly Rs 1.3 trillion (Rs 1.3 tn) in FY23. When state-level awards are included, combined NHAI?plus?MoRTH awards in FY26 totalled 7,000 km, down from 7,538 km in FY25, a seven per cent year-on-year fall and far short of the more than 12,000 km awarded across FY22–23. Overall road construction declined 12 per cent year on year in FY26, after a 14 per cent fall in FY25. The report highlights persistent land acquisition delays that are lagging the pace of approvals. The slowdown has structural implications for the commercial vehicle and construction equipment supply chain that supports highway building. Nuvama highlighted that listed developers' share of NHAI awards has shrunk from roughly 61 per cent in FY16–18 to 31 per cent in FY19–21 and to 25 per cent over FY22–25, with the share remaining at 25 per cent in FY26. Smaller unlisted players have been winning a larger slice of available work, reducing revenue visibility for listed firms. NHAI's capital expenditure was roughly flat at Rs 2.4 trillion (Rs 2.4 tn) in FY26 while the agency's construction output fell about five per cent to 5,313 km, indicating a reallocation of funds. Asset monetisation raised around Rs 283 bn in FY26, slightly below earlier levels, and much of the proceeds is funding debt repayment as the debt to equity ratio fell to 0.17 times. With a muted FY27 road outlay and the agency prioritising deleveraging over expansion, a near-term pickup in awards appears unlikely, the note suggested. Nuvama advised road developers to pursue segmental diversification as their ability to secure orders at desired margins is under question. The brokerage said it remained cautious on the roads sector given the subdued project pipeline and potential knock-on effects for allied industries.

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