According to Motilal Oswal Financial Services, the infra project awarding activity picked up and gathered pace in Q4 of FY23, with NHAI awarding total projects of 6,003 km in FY23, much below its FY23 target of 6,500 km. The total value of projects awarded by NHAI was INR 1.26t in FY23, down 15% YoY. NHAI’s highway construction pace increased 13% YoY to 4,882km in FY23. Out of which, AP received the highest number of projects (32) and made up 16% of the total value of projects awarded. Five states, namely AP, Bihar, UP, Jharkhand, and Telangana, made up 54% of the total value of projects awarded in FY23.
The infra sector will remain in focus due to consistent efforts of asset monetization and softening of the input prices which will improve the margins of many infra players in FY24. The increased budget allocation for roads (+25% YoY) in the Union Budget of FY24 raises expectations for improved awarding in the future. The central government intends to accelerate the construction of roads in FY24 by 15-20% with a healthy pipeline of projects and an increase in the capital expenditure outlay.