India Ratings revises outlook for construction sector to negative for FY21

India Ratings has revised its outlook for the construction industry to negative for FY21 on the back of muted order inflows and subdued bank credit flow.

The outlook revision follows significant risks emerging from the exposure of certain construction companies to the state governments of Andhra Pradesh, Telangana, Tamil Nadu and Bihar, the ratings agency said.

"There has been a higher utilisation of working capital limits, especially non-fund based facilities. Also, the delays in the sanction of additional limits is likely to adversely affect the execution capabilities and ability of infrastructure companies to bid for new orders," India Ratings' Senior Analyst Sudeep