India Ratings Maintains Stable Outlook For Construction Companies

New Delhi: A majority of the construction companies in the country are expected to have healthy revenue growth because of which India Ratings and Research has maintained a ‘stable’ outlook for them for the remainder of the current fiscal 2019-20.

There is expected to be a slowdown in orders for roads, highways, bridges, and irrigation infrastructure but this slowdown is expect to be compensated by higher order inflows for urban infrastructure projects like metro train, housing, water supply and many such other segments, India Ratings said in a statement.

“Therefore, Ind-Ra expects limited rating changes in its portfolio of construction companies in 2HFY20. Nonetheless, the overall improvement in the financial profile of construction companies is more likely to be determined by their ability to manage their existing working capital resources in a prudent manner,” India Ratings said in a statement.

The construction companies that are focused on the road EPC business are expected to experience very little developments as regards their ratings during the second half of the current fiscal as they are likely to execute their order books in a time bound manner. But the revenue visibility of these infrastructure companies may get affected by the slowdown in the speed of awarding road projects.