Emerging construction firms to post steady 9–11% revenue growth in FY26: Crisil

Emerging diversified construction companies are expected to register stable growth in FY26, with revenue projected to increase by 9–11%, according to Crisil Ratings. This growth is supported by healthy order books and timely project execution, which continue to enhance operational scale and market credibility. These firms had earlier recorded a 15% compounded annual growth rate over the five years through 2025. However, despite the positive revenue outlook, operating margins are expected to remain flat at 10–11% due to limited flexibility in passing on commodity price fluctuations and rising competition.
Crisil’s analysis of 200 such companies, with a combined estimated revenue of Rs. 1,00,000 crore (US$ 11.68 billion) in FY25—around 10% of India’s overall infrastructure spend—highlights several trends. While working capital needs will rise, these are expected to be met through improved cash flows and sound risk management, reducing reliance on fund-based bank borrowings. Additionally, timely execution of large order books will likely require debt-funded capital expenditure on equipment, though strong internal accruals should help maintain controlled leverage and stable credit profiles. The government’s continued focus on infrastructure and better funding access is set to support these companies. However, increased subcontracting costs and competitive pressures may keep profitability in check.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.