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The Ministry of Road Transport and Highways (MoRTH) is emphasizing a corridor-based approach for highway development, prioritizing consistent standards, user convenience, and logistics efficiency says a report by Axis Securities.
A comprehensive study leveraging GSTN and toll data has identified a high-speed highway corridor network spanning 50,000 km, crucial for India's vision of becoming a USD 30 trillion economy by 2047. By the end of FY25, the Ministry of Road Transport and Highways (MoRTH) aims to operationalize 4,827 km of high-speed corridors, having already reached 4,693 km by December 2024. Major projects like the Delhi-Mumbai Expressway, Delhi-Dehradun Expressway, and Bengaluru-Chennai Expressway are expected to be completed this year, signalling a new era in highway connectivity. The National Highways Authority of India (NHAI) is setting its sights on transforming the country's highway infrastructure in 2025, aiming to deliver safer, smoother, and more efficient travel experiences. Despite challenges, highway construction achieved 4,900 km in the first eight months of FY25, slightly below last year's performance. The government's target of constructing 10,400 km of national highways this fiscal year remains ambitious, with NHAI tasked with completing 5,000 km. Toll collection is also on an upward trajectory, with 2024 collections likely exceeding Rs70,000 crore. October 2024 witnessed record electronic toll collections of Rs6,115 crore, highlighting the impact of increased logistics and personal travel during the festive season. In FY24, NHAI's asset monetization efforts yielded a record Rs40,000 crore, reducing its debt from Rs3.3 trillion to Rs2.76 trillion by December 2024. Monetization strategies included Toll Operate and Transfer (TOT), Infrastructure Trusts (InVIT), and securitization via Special Purpose Vehicles (SPVs). While the sector shows long-term promise, road construction companies face short-term revenue challenges. Axis Securities reports a 3 per cent year-on-year revenue dip in Q3FY25, with EBITDA and profit after tax declining by 4 per cent and 10.7 per cent, respectively. However, the sector is buoyed by strong order books and diversification into non-road projects such as water supply, irrigation, solar energy, and battery storage services. The government plans to award 12,900 km of highway projects in FY25, a 50 per cent increase over the previous year, supported by the National Infrastructure Pipeline and higher capital expenditure in the Union Budget. This, coupled with innovations like satellite navigation-based toll systems, positions the infrastructure sector for robust growth. (ANI)
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