Road Construction to Dip in FY26
ROADS & HIGHWAYS

Road Construction to Dip in FY26

India’s road construction pace is set to slow down in FY26, with the Ministry of Road Transport and Highways (MoRTH) expected to build 9,500-10,000 km, marking a 5% decline from the estimated 10,000-10,500 km in FY25, according to ICRA. The slowdown is attributed to reduced project awarding over the past two years.

In the first nine months of FY25, MoRTH awarded just 3,100 km of projects, significantly lower than the 5,835 km awarded in the same period of FY23. However, a recent pickup in awarding since November 2024 could push project awards to 8,500-9,000 km in FY25, with potential growth of 9-11% in FY26 if the momentum continues.

“With awarding expected to improve only in FY26, road developers may see subdued revenue growth over the next 12-15 months,” said Vinay Kumar G, Sector Head, Corporate Ratings, ICRA, noting that competition will remain high as firms aggressively bid for limited projects.

Meanwhile, toll collection growth is set to moderate due to slower expansion in the construction, manufacturing, and mining (CMM) sectors. Traffic growth is likely to ease to 2-3.5% in FY25, with toll revenue rising 5-7%. In FY26, an expected 3.5-4.2% increase in toll rates and 3-5% traffic growth could drive toll collections up 7-9%, the report added.

India’s road construction pace is set to slow down in FY26, with the Ministry of Road Transport and Highways (MoRTH) expected to build 9,500-10,000 km, marking a 5% decline from the estimated 10,000-10,500 km in FY25, according to ICRA. The slowdown is attributed to reduced project awarding over the past two years. In the first nine months of FY25, MoRTH awarded just 3,100 km of projects, significantly lower than the 5,835 km awarded in the same period of FY23. However, a recent pickup in awarding since November 2024 could push project awards to 8,500-9,000 km in FY25, with potential growth of 9-11% in FY26 if the momentum continues. “With awarding expected to improve only in FY26, road developers may see subdued revenue growth over the next 12-15 months,” said Vinay Kumar G, Sector Head, Corporate Ratings, ICRA, noting that competition will remain high as firms aggressively bid for limited projects. Meanwhile, toll collection growth is set to moderate due to slower expansion in the construction, manufacturing, and mining (CMM) sectors. Traffic growth is likely to ease to 2-3.5% in FY25, with toll revenue rising 5-7%. In FY26, an expected 3.5-4.2% increase in toll rates and 3-5% traffic growth could drive toll collections up 7-9%, the report added.

Next Story
Infrastructure Urban

Anupriya Patel Inaugurates QUAD Workshop on Pandemic Preparedness

The QUAD Workshop on Pandemic Preparedness for the Indo-Pacific region, inaugurated by Union Minister of State for Health and Family Welfare, Smt. Anupriya Patel, marks a significant step in enhancing global health security. Held from March 17-19, 2025, the workshop aims to strengthen pandemic preparedness frameworks, improve surveillance systems, and promote international collaboration to mitigate health threats. Organised by the Ministry of Health and Family Welfare and the Ministry of External Affairs, the event brings together experts from India, the United States, Japan, Australia, and 15..

Next Story
Infrastructure Urban

MoEFCC & Harvard to Host Conference on Climate Resilience

The Ministry of Environment, Forest and Climate Change (MoEFCC), in collaboration with Harvard University’s Lakshmi Mittal and Family South Asia Institute and the Salata Institute for Climate and Sustainability, will host the ‘India 2047: Building a Climate-Resilient Future’ conference in New Delhi from 19th–22nd March 2025. This landmark event will focus on adaptation strategies and resilience-building to address climate change challenges, bringing together policymakers, academia, private sector leaders, and international experts to develop a roadmap for a sustainable and climate-resi..

Next Story
Infrastructure Urban

PM VIKAS Scheme Focuses on Empowering Minority Communities

The Pradhan Mantri Virasat Ka Samvardhan (PM VIKAS) scheme, a flagship initiative of the Ministry of Minority Affairs, aims to uplift six notified minority communities through skill development, entrepreneurship, and education support. By converging five previous schemes—‘Seekho Aur Kamao’, ‘Nai Manzil’, ‘Nai Roshni’, ‘Hamari Dharohar’, and ‘USTTAD’—the programme fosters economic inclusion while facilitating credit access for beneficiaries through the National Minorities Development & Finance Corporation (NMDFC). Market and Industry Outlook: With a growing emphasis on..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?