India's Road Projects Set for Major Boost in FY25: Axis Securities Report

India's road project awards are poised for a strong uptick in FY25, driven by a robust Rs 1.1 trillion bidding pipeline. HAM and EPC projects dominate, comprising over 80% of the pipeline. Recent policy changes aim to streamline the bidding process, ensuring timely project awards despite FY24 delays.

A significant surge in the awarding of road projects in India is anticipated in Fiscal Year 2025, as disclosed in a report by Axis Securities. This uptrend is marked by a substantial increase in the number of awarded projects, with a robust bidding pipeline valued at Rs 1.1 trillion as of September 2024.

The report highlights the dominance of hybrid annuity model (HAM) and engineering, procurement, and construction (EPC) projects, which comprise 47% and 36% of the entire pipeline, respectively. These models are expected to prevail in the upcoming project awards, with a potential rise in build-operate-transfer (BOT)-Toll projects.

The uptick in project awards is largely attributed to the compensation for delayed awards during FY24. The National Highways Authority of India's established pipeline and the Ministry of Road Transport and Highways' streamlined bidding policy aim to enhance the pace of awards. Upcoming fiscal years could face challenges, but the sector is well-prepared with a diverse order book.

(With inputs from agencies.)