ICRA predicts 12-15% revenue growth for Indian construction entities in FY2025, supported by robust order book and government focus on infrastructure, with steady operating income growth and solid coverage metrics. ICRA’s Vice President, Chintan Lakhani, reported stable aggregate order book-to-sales ratio for companies in March 2024, indicating strong medium-term revenue growth. Diversification into drinking water, metro projects, and railway station development helped sustain order books. ICRA’s construction companies’ order book has grown between 3.3x and 4.0x of operating income in five years, with transportation and building dominating, but share declining to 62% in FY2024.
Moderate steel prices supported construction earnings in FY2024, but rising prices could impact FY2025. Operating margins are stable at 11%, supported by leverage benefits. ICRA predicts a prolonged cash conversion cycle, increasing debt levels to meet working capital requirements, but operational leverage benefits will maintain interest coverage at 4.0 times in FY2025.
Group Media Publication
Construction, Infrastructure and Mining
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