Order rebound could lead to uptick for road infrastructure players

NHAI has front loaded awards because there was a large number of awards in April 2022

There may be an ongoing slowdown in the roads sector. Road construction companies working in the engineering procurement and construction (EPC) mode had weak execution in the second quarter of the 2022-23 financial year (Q2FY23), being affected by lower backlogs and heavy monsoons.

Diversified players like L&T, KEC and NCC did better. On the whole, debt and net working capital levels improved for the segment but there were exceptions. The Q2 order inflows were low or nil for road developers. The National Highways Authority of India (NHAI) award of road contracts was weak in the first half (H1) of FY23.