India has built a significant road asset base, with much of this network now operational. The sector’s priorities are shifting from rapid construction towards long-term maintenance and sustainable financing. Despite the prevailing headwinds, the sector’s fundamentals remain strong. Against this backdrop, industry leaders from select infrastructure companies discuss the slowdown in project awards and construction activity, challenges facing the sector, key operational metrics and the way forward, in their recent earnings calls published on the Bombay Stock Exchange. Key takeaways…
Yogesh Jain
In the roads and highways sector, the National Highways Authority of India’s (NHAI) project awarding activity remained subdued in the first quarter of 2026-27, with only 107 km awarded. Additionally, the execution moderated to approximately 640 km. This slowdown was primarily driven by a weak award pipeline and continuing geopolitical tensions. However, we expect the pace of awarding to improve going forward, supported by a healthy project pipeline.
Recently, NHAI launched 54 highway and expressway projects, for an estimated aggregate value of around Rs 1.8 trillion for bidding over the next two to three months. The identified pipeline comprises 26 engineering, procurement and construction (EPC) projects, 21 hybrid annuity model (HAM) projects and seven design-build-operate-transfer toll projects across states. A balanced mix of projects with sizeable value is expected to create opportunities across different implementation formats for both fund-based and non-fund-based highway developers. The government also continues to make steady progress in expanding India’s high-speed highway network. A cumulative 10,389 km of national high-speed corridors have been launched across the country, of which 4,809 km has already been completed, while 5,580 km is currently in the under-bidding and implementation stages.
“The government continues to make steady progress in expanding the high-speed highway network.” Yogesh Jain
On the project side, in May 2026, PNC Infratech received the letter of award (LoA) from the Lucknow Development Authority, Uttar Pradesh, for the construction of a four-lane flyover on an EPC basis. The project is valued at Rs 1.94 billion and is scheduled to be completed within 24 months. During the same month, a PNC Infratech joint venture (JV) received the LoA from Uttar Pradesh State Bridge Corporation Limited for the construction of a four-lane bridge over the Ganga river in Kanpur on an EPC basis. The project is valued at Rs 5.59 billion and is scheduled to be completed within 36 months, with a 50:50 participation ratio between the JV partners. The company also received Rs 2.34 billion from NHAI as per the one-time settlement agreement executed with NHAI in relation to the arbitration award for the Agra bypass EPC project under the Vivad-Se-Vishwas Scheme III. Further, on July 31, 2026, an arbitration award of Rs 2.44 billion was published in favour of the company in connection with an EPC project for the upgradation of the Sonauli to Gorakhpur section of NH-29E, executed for the Uttar Pradesh Public Works Department.
In June 2026, the completion certificate was received for a HAM project, Prayagraj Kaushambi Package 3, with effect from June 20, 2026. Concession agreements were also signed with NHAI on July 16, 2026 by two new special purpose vehicles (SPVs) incorporated by the company, namely, Barabanki Mustafabad Highway Private Limited and Mustafabad Biswariya Highway Private Limited, for the implementation of the two new HAM projects secured in Q1 FY 2026-27.
The company’s 17 fund-based project portfolio comprises one build-operate-transfer (BOT) toll project, two BOT annuity projects and 14 HAM projects. The aggregate bid project cost of the 14 HAM projects is over Rs 172 billion. Of the total 14 HAM projects, six projects have achieved provisional commercial operation date COD, five projects are under construction, financial closure documents have been submitted for one project of Madhya Pradesh Road Development Corporation Limited, and concession agreements have been signed for two projects, for which the financial closure process is currently under way. The total equity investment requirement for the HAM projects is Rs 16.23 billion, excluding two newly awarded HAM projects for which financial closure is yet to be achieved. Overall, highway contracts contribute 64 per cent of the total unexecuted order book.
Satish Parakh
Q1 2026-27 has started on a mixed note for the infrastructure sector. On the one hand, the domestic highway awarding environment continues to remain subdued. On the other hand, we are seeing encouraging opportunities emerging in sectors such as railways, power transmission, distribution and international infrastructure.
In the roads and highways sector, the pace of fresh awarding continues to be below the levels we have seen historically. NHAI awarded only around 5 km of projects in June 2026 compared with 102 km in May 2026, while construction activity in June declined 32 per cent year on year to around 274 km. For the first two months of 2026-27, construction stood at approximately 638 km, which is around 34 per cent lower year on year. We expect healthy awarding to happen around Q3 or Q4 of 2026-27.
Of late, NHAI is going for bigger-sized packages. This will definitely rationalise the competition and result in healthy competition among players. Some projects are coming up for bidding. NHAI is expected to invite bids for four major projects in Uttar Pradesh. There is also a strong pipeline of projects from National Highways and Infrastructure Development Corporation Limited in the Northeast. Additionally, several projects are expected to come up in Hyderabad. In terms of the bid pipeline, NHAI and the Ministry of Road Transport and Highways alone are expected to bring in around Rs 1 trillion worth of bids. State-wise, about Rs 250 billion worth of bids are in the pipeline.
So, while we remain positive on the long-term fundamentals of India’s road infrastructure, we believe the sector is currently going through a period where the focus is shifting from simply awarding more kilometres to ensuring that projects are properly appraised, land is made available and execution can proceed efficiently. For us, this makes diversification particularly important. At the same time, the medium- to long-term opportunities in infrastructure remain strong.
“The focus is shifting from simply awarding more kilometres to ensuring that projects are properly appraised, land is made available and execution can proceed efficiently.” Satish Parakh
Harendra Singh
India continues to remain focused on infrastructure development, creating a strong long-term opportunity for companies with proven execution capabilities. Against this backdrop, H.G. Infrastructure Limited has evolved significantly over the past two decades. What started as a focused road and highway company has now transformed into a diversified infrastructure platform with capabilities across EPC and HAM projects in the highway sector, along with a growing presence across other sectors in over 14 states now.
Revenue during the last quarter was impacted by several external and internal factors as the infrastructure industry experienced a period of slower growth and overall sluggishness. This was driven by multiple industry headwinds that impacted H.G. Infrastructure, affecting new project awarding, execution momentum and the overall business spectrum, with project awarding and bidding activity remaining muted. Geopolitical uncertainties have also had a significant impact. Intensifying competition and lower margins, as always, remained key challenges. Against this backdrop, H.G. went through a phase of consolidation with a focus on maintaining stability across all key metrics – leadership, automation, manpower and process realignment. Greater emphasis was also placed on strengthening the balance sheet by improving cash flows, accelerating debt realisations and enhancing execution efficiencies to propel the company into the next phase of growth.
Project-specific and external factors materially impacted our execution momentum and contributed to the deep decline in our top line in Q1 2026-27. These were unprecedented and largely unexpected factors. Most of these issues are now under control, and we are working towards regaining the desired execution momentum. We remain confident about the upcoming quarters, particularly the period post monsoon. The second half of 2026-27 is expected to be more promising, with improved execution and meaningful recovery in our performance. This aside, as of Q1 2026-27, the company’s order book stood at Rs 145.02 billion, with roads and highways accounting for Rs 93.86 billion.
We have received the provisional completion certificate for the Raipur-Visakhapatnam corridor projects including OD-5, 6 and AP-1, and the Khammam-Devarapalli projects, KD-1 and 2. The COD for all these projects is expected to be received in Q3 2026-27, with pending issues now being resolved. The Chennai-Tirupati HAM project reached 59.6 per cent completion. The Varanasi-Kolkata Package 13 has achieved 43.1 per cent financial progress. the Varanasi-Kolkata Package 10, which received its appointed date effective May 20, 2026 in Q1 2026-27, has now achieved 15.5 per cent completion. For the Kosi Parikrama Package 6 in Ayodhya, project execution has reached 35.7 per cent completion. The Narol-Sarkhej project has achieved 44.2 per cent progress and remains on track for timely completion. The company signed a contract agreement on April 24, 2026 for the Gobindpur-Tangi-Capital Regional Ring Road Package 3 in Odisha. The land acquisition process is at an advanced stage, and the appointed date is expected in Q3 2026-27.
Going forward, we are targeting an order inflow of Rs 110 billion-Rs 120 billion in 2026-27, of which projects worth approximately Rs 55 billion are already being received in Q1 2026-27. Additionally, NHAI has identified 54 projects worth approximately Rs 1.85 trillion to be awarded in 2026-27.
“India continues to remain focused on infrastructure development, creating a strong long-term opportunity for companies with proven execution capabilities.” Harendra Singh
Paramasivan Srinivasan
The first quarter of 2026-27 continued to be impacted by some of the factors that affected us during 2025-26, along with certain execution delays across a few projects due to factors beyond our control. Liquidity conditions remained tight and collections continued to be moderate during the quarter. We remain actively engaged with our clients at multiple levels to accelerate recoveries and improve cash flows over the coming months.
Coming to profitability, we reported an earnings before interest, taxes, depreciation and amortisation margin of 9.6 per cent during the quarter. The moderation in profitability was primarily due to lower revenues during the quarter. As turnover improves across projects, we expect profitability to correspondingly improve over the coming quarters. In terms of the order book, we have begun the year 2026-27 on a positive note with a healthy order inflow of Rs 132.19 billion during Q1. With these orders, our order book stood at Rs 432.9 billion at the end of the quarter, providing strong visibility for future revenues. Currently, our orders booked for the year stand at Rs 157 billion. With this, there are no orders pending to be converted from lowest bidder status into confirmed orders. The healthy order book positions us well for sustained growth over the medium term.
As these projects progressively move into the execution phases, we expect improved operational momentum and a gradual strengthening of our financial performance. While this is encouraging, we remain equally focused on securing new orders and further strengthening our order book over the year. Our teams continue to actively pursue opportunities across both domestic and international markets, and we remain confident of achieving our full-year order inflow guidance of Rs 300 billion. This is supported by our healthy bid pipeline of approximately Rs 1.5 trillion for the remaining nine months of 2026-27, and Rs 3.96 trillion for the next two years across the transportation, marine, hydro, underground, water, urban infrastructure and industrial infrastructure segments. The pipeline is well diversified across segments and geographies and consists of projects that align well with our technical strengths and disciplined risk management framework.
We begin this year with a healthy order book, a robust bid pipeline and a team that has repeatedly demonstrated its ability to deliver complex engineering projects under challenging conditions. As execution across our existing projects gathers pace, and recently secured orders move into their main construction phases, we expect a gradual improvement in performance over the coming quarters.
We remain committed to disciplined execution, prudent risk management and operational excellence, while continuing to pursue opportunities that align with our long-term strategy. With our strong technical capabilities, diversified presence and proven track record, we remain confident in our ability to navigate the current environment and create sustainable long-term value for all our stakeholders.
“While some of the challenges that affected 2025-26 have continued into the first quarter of the current year, we remain encouraged by the conversion of key orders and opportunities ahead.” Paramasivan Srinivasan
Rohan Suryavanshi
The infrastructure sector continues to enjoy strong policy support with sustained government focus on roads, railways, water, transmission and renewables, all sectors in which we are currently actively engaged. The awarding cycle in Q1 2026-27 was on the softer side, as is usually the case, particularly for national highways, on account of the ongoing recalibration of the Bharatmala Pariyojana pipeline and process-related delays. However, the medium-term signal from the government remains constructive. During the quarter, NHAI articulated its 2026-27 project pipeline of 54 highways and expressway projects, covering 2,442 km, with a total capital cost of approximately Rs 1.8 trillion, spread across 13 states. Of these, 26 projects are proposed under the EPC route, 21 under the HAM route and 7 under the BOT route. This gives the industry a clear line of sight on award activity for the remainder of the year. It is also heartening that our strategy is aligned with the government’s monetisation programme.
NHAI has finalised 17 highway stretches spanning approximately 1,693 km for monetisation in 2026-27 through its toll-operate-transfer and infrastructure investment trust (InvIT) routes. This is expected to generate proceeds in the range of Rs 300 billion-Rs 350 billion. This is part of the second phase of the National Monetisation Pipeline, under which the road sector alone is targeted to unlock Rs 4.42 trillion between 2025-26 and 2029-30. This validates the InvIT-led capital recycling model we are building at Dilip Buildcon Limited (DBL) and reinforces the depth of the institutional market for the operating road assets we develop and transfer. Now, global uncertainties around crude prices definitely continue to weigh on fuel, bitumen and related input costs. Working capital cycles across the industry remain elongated, and administrative delays on project approvals and payments have persisted through the quarter. In our assessment, these are cyclical rather than structural, and the medium-term thesis for Indian infrastructure remains firmly intact. Our approach therefore continues to be one of selective tendering, execution discipline and preservation of balance sheet strength.
During the quarter, we have completed three HAM projects worth Rs 17 billion, all forming part of the Bengaluru-Vijayawada expressway in Andhra Pradesh. Each of these packages was completed ahead of the scheduled COD, consistent with a track record of nearly 90 per cent early completion across our project portfolio.
As of June 30, 2026, DBL, along with its associates and economic interests, holds units worth approximately Rs 13.14 billion at face value in the Anantam Highway Trust and units worth approximately Rs 2.07 billion at face value in the Shrem InvIT. This takes the total value of units held by the group to approximately Rs 15.21 billion. We remain on track to transfer the remaining HAM assets in phases through March 2027. The next tranche of 11 assets that will be flipped is expected to require less than Rs 810 million of incremental equity investment while generating InvIT units valued at approximately Rs (+17.5) billion.
“The awarding cycle in Q1 2026-27 was on the softer side, particularly for national highways, on account of the ongoing recalibration of the Bharatmala Pariyojana pipeline and processrelated delays. However, the medium-term signal from the government remains constructive.” Rohan Suryavanshi
Anil Yadav
Starting with the business update, IRB Infrastructure Trust, our private InvIT, has signed a binding term sheet to transfer two BOT highway assets with an enterprise value of Rs 46.05 billion. This marks the fourth cycle of our “bid, execute, stabilise and transfer” strategy, after successfully completing the previous cycle less than two quarters ago, and reflects the strength of our capital recycling model.
By periodically monetising mature assets owned by the private InvIT and redeploying that capital into new opportunities, we are building a self-sustaining growth platform that compounds shareholder value without requiring additional equity from the sponsor. This transaction benefits both InvITs. It strengthens the public InvIT’s portfolio with seasoned, high quality, revenue-generating assets and extends its weighted average concession life, while replenishing the private InvIT’s capital base for investing in future opportunities and development. This model reinforces IRB’s evolution into a leading sponsor and operations and maintenance platform and keeps us on track towards our goal of building a Rs 1,400 billion asset base over the next three to four years.
During the quarter, we successfully completed the refinancing of approximately Rs 37 billion for our wholly owned IRB Mumbai-Pune expressway concession. The refinancing has reduced our borrowing cost by around 65 basis points, resulting in annual interest savings of approximately Rs 250 million. As highlighted earlier, we expect to become net debt-free by 2029-30, supported by consistent debt repayments, which are already translating into lower finance costs.
Another key milestone during the quarter was the successful completion of our Rs 110 billion refinancing across six SPVs in the private InvIT. We refinanced the debt at the AAA-rated trust level, which has significantly strengthened our overall capital structure. As a result, we have reduced our borrowing cost by approximately 160 basis points, translating into annual interest savings of around Rs 1.8 billion. In addition, the transaction has optimised our debt amortisation profile and improved tax efficiency, provided greater financial flexibility and supported higher returns through improved distributable cash flows over the long term. This refinancing reinforces our focus on proactive balance sheet management and creating sustainable value for our unitholders.
Overall, the combined portfolio of our 100 per cent subsidiaries, private and public InvITs, recorded average daily toll collections of about Rs 270 million, compared to Rs 214 million in the corresponding quarter of the previous year, representing a strong 26 per cent year-on-year growth. This performance reflects the resilience of our portfolio, continued traffic growth and the successful execution of our asset expansion strategy.
In line with our dividend distribution policy, for Q1 2026-27, the company has declared an interim dividend of approximately Rs 600 million. Our total order book now stands at about Rs 441 billion, including an EPC order book of Rs 17 billion.
“By periodically monetising mature assets owned by our private InvIT and redeploying that capital into new opportunities, we are building a selfsustaining growth platform that compounds shareholder value without requiring additional equity from the sponsor.” Anil Yadav
