India's construction sector entities' revenues likely to grow by 12-15% in FY25: ICRA
Rating agency ICRA has said India's construction sector entities' revenues are likely to grow by 12-15 per cent in the current financial year (FY25), while margins will expand by 25-50 bps. Further, it said that the government's infrastructure push will result in double-digit revenue growth for the construction industry in FY25.
The rating agency said it maintains a stable outlook on the sector with steady growth in operating income, moderate leverage, and healthy coverage metrics. ICRA vice president and co-group head - corporate ratings Ashish Modani said ‘The aggregate order book-to-sales ratio of ICRA's sample set of companies stood at around 3.9x as of December 2023 (compared to 3.4 times during March-2023), thereby indicating a healthy revenue growth prospect over the medium term’.
He said, ICRA expects the revenue growth in FY25 to remain healthy at 12-15 per cent on a year-on-year basis, albeit slightly lower than the 18-20 per cent revenue expansion assessed for FY24, owing to high base and some tapering in execution momentum in Q1 FY25 amid Parliamentary elections.
