New Delhi [India], July 2 : Awarding of road construction projects by National Highway Authority of India (NHAI) have remained tepid for the second year in a row. A report by Nuvama Institutional Equities noted that pace of construction of roads however increased.
The report noted that recently-concluded financial year 2024-25 paints a bearish outlook and a challenging times for road developers.
In its report 'Road sector: Potholes galore', Nuvama asserted that road awarding remained tepid in 2024-25 due to the government's decision to halt project awards under the Bharatmala programme.
Besides, no increase in road capital expenditure in the Budget for 2025-26 also implies that a pickup in road awards is unlikely in the near term, added the report.
"Given sluggish road awards, we argue road developers must work on segmental diversification since their ability to win adequate road orders at desired margins is now under question. We remain cautious on the roads space," the report read.
In 2024-25, according to the report, NHAI awarded 2,170 km roads (against 1,300 km in 2023-24).
The NHAI awards' value of Rs 470 billion in 2024-25 and Rs 350 billion in 2023-24, remained much lower than previous years - Rs 1.5 trillion in 2021-22 and Rs 1.3 trillion in 2022-23.
However, the report noted that amidst the slowdown of awards for new roads, construction of roads gathers pace.
Road building increased year-on-year to 404 km in Jun 2025 as against 375 km in May 2025 and 248 km in June 2024.
The total road construction in the first quarter of 2025-26 (April-June) stood at 961 km, up 14 per cent year-on-year.
The NHAI surpassed its 2024-25 road construction target by 9 per cent and constructed 5,614 km of roads in the recently-concluded fiscal. Nevertheless, road construction by the NHAI in 2024-25 was down 15 per cent year-on-year due to muted awards over the past few years.
In the NHAI awards, listed developers' market share--which plunged from 61 per cent over 2015-16-18 to 31 per cent over 2018-19-21 and 25 per cent over 2021-22-24--further decreased to 24 per cent in 2024-25, the noted Nuvama report.