Road builders ride high on policy initiatives

The road builders across the country have recorded business growth of about 30-150% since March 2017 following a slew of government reformist initiative. Construction companies including KNR Constructions, Dilip Buildcon, Sadbhav Engineering, and PNC Infratech have made the most out of the emerging business opportunities in the road sector. Moreover, the recently launched Bharatmala project to build highways in the North and the North-East of the country is likely to boost the future growth further for these players, thereby, helping them sustain the valuations. Construction companies are attracting investors given their higher revenue visibility amid reduced hurdles in project execution. For instance, NHAI has facilitated clearance of more than 80% of the land acquired for execution of projects. This works in favor of construction companies since this was a major hurdle in the past five years. The Bharatmala project consists of approximately 84,000 km of roads by 2022 at the cost of around Rs.7 lakh crore. Of this, the government will spend Rs.5.8 lakh crore to build 34,800 km of highways.