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Road project awards are unlikely to recover meaningfully in FY27 as there has been no increase in the National Highways Authority of India (NHAI) capital expenditure (capex) budget, according to a report by Nuvama.
The report said road awards have remained weak over the past few years, with NHAI missing its FY26 target of awarding around 4,500 km of highway projects. Nuvama attributed the slowdown to delays in project approvals and appraisal, along with limited private sector interest in Build-Operate-Transfer (BOT) projects. "Delays in project appraisal and approval along with reluctance on part of the private sector to take up BOT projects had caused the NHAI to miss its full-year awarding target of ~4,500km for FY26," it said. Additionally, the authority's award value at ~Rs 470 billion in FY25 (~Rs 350 billion in FY24) remained much lower than previous years (~Rs 1.5 trillion in FY22 and ~Rs1.3 trillion in FY23). With no increase in capital expenditure in the NHAI budget for FY27E, a meaningful recovery in road awards appears unlikely "FY27 road sector capex budget at INR2.9 billion increased 8% YoY compared with FY26 BE/RE after being flat for two consecutive years," it said. As per the report, the authority had earlier awarded two road projects in Jun-26 spanning ~5km (102km awarded in May-26 and 13km awarded in Jun-25) while construction plunged 32 per cent YoY to 274km (324km in May-26). The NHAI awarded road projects spanning 3,124km (down 22% YoY) in FY26 while constructing 5,313km (down 5% YoY).The report said road awards have remained weak for the third straight year, largely due to the government's decision to pause new project awards under the Bharatmala programme. In June 2026, NHAI awarded only around 5 km of road projects, compared with 102 km in May 2026 and 13 km in June 2025. Road construction during the month dropped 32 per cent year-on-year to 274 km. In the first two months of FY27, road construction stood at around 638 km, down 34 per cent from a year earlier. Nuvama also noted that muted road awards in recent years have weighed on construction activity. NHAI's road construction in FY25 had already declined by around 15 per cent year-on-year. The report added that the share of listed developers in NHAI project awards has steadily declined, falling from about 61 per cent during FY16-FY18 to around 31 per cent in FY19-FY21 and further to nearly 25 per cent during FY22-FY26. (ANI)
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