NHAI road award slowdown deepens, FY27 outlook remains challenging: Nuvama

The report highlighted that this marks continued weakness in the sector, following nil awards in April 2025 and a sharp drop from 1,632 km awarded in March 2026. The report noted, "The NHAI did not award any road projects during Apr-26 against 1,632km across 131 projects awarded in Mar-26."

Construction activity also declined significantly, falling 78 per cent year-on-year to around 40 km in April 2026.

The report notes, "Road construction too fell 78% YoY to just ~40km in Apr-26 against (1,619km in Mar26 and 182km in Apr-25)."For the full financial year 2025-26, NHAI awarded 3,124 km of road projects, down 22 per cent year-on-year and below its target of approximately 4,500 km. The report says, "Delays in project appraisal and approval along with reluctance on part of the private sector to take up BOT projects have caused the NHAI to miss its full-year awarding target of ~4,500km for FY26".

Road construction during FY26 stood at 5,313 km, reflecting a marginal 5 per cent decline from the previous year, though it exceeded the authority's internal target of 5,000 km. The report attributed the slowdown in project awards to delays in approvals and limited private sector participation in build-operate-transfer (BOT) projects. It also noted that road awarding has remained weak over the past few years, with project award values significantly lower than earlier peaks seen in FY22 and FY23. Looking ahead, the outlook remains challenging. The report pointed out that there is no increase in budgetary allocation for NHAI in FY27, suggesting limited scope for a near-term recovery in project awards. Additionally, the market share of listed developers in NHAI awards has declined further to 24 per cent in FY25, continuing a multi-year downward trend. Meanwhile, overall road sector capital expenditure in the FY27 budget is estimated at around Rs 2.9 trillion, reflecting an 8 per cent increase after two years of muted growth. (ANI)