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NHAI awarding remains muted YTDFY26

* The pace of project awarding by NHAI has remained subdued in FY26. As of midNov’25, only ~504?km was awarded against the annual target of 6,376km. The slow start is attributed to a combination of factors, including a higher focus on land acquisition before awarding, procedural delays, and a temporary shift in focus towards project execution rather than new awards. The overall muted awarding has impacted order inflows for several road construction companies. However, companies now expect government awarding activity to gain traction and remain highly positive on a revival in the order book in 2HFY26.

* On the construction front, NHAI built 2,062kms of national highways from Apr’25 to mid-Nov’25, against the full-year target of ~6,000km. The focus remains on ramping up execution in the coming quarters to meet the annual targets. NHAI exceeded its highway construction target of 5,150km and built 5,614km in FY25.

* FASTag toll collections grew ~12% YoY in terms of volume and ~18% YoY in terms of value during Jul’25-Oct’25, supporting asset monetization plans.

* For FY26, NHAI has set an asset monetization target of INR300b (vs INR287b achieved in FY25). The monetization will primarily be routed through the Toll-Operate-Transfer (ToT) model and Infrastructure Investment Trusts (InvITs). To support this goal, NHAI has identified a pool of 24 assets spanning 1,472km for monetization in FY26. The proceeds will be deployed for highway development, debt repayment, and generating returns for investors. NHAI recently awarded its 17th ToT bundle to IRB Infrastructure for INR93b.

* The Dedicated Freight Corridor Corporation of India (DFCCIL) has commissioned 2,741km of the planned 2,843km for both the Eastern and Western Dedicated Freight Corridors (DFCs). The completion timeline is expected by Dec’25, following delays in land acquisition.

FASTag toll collections showing consistent improvement

FASTag toll collection volume improved ~12% YoY over Jul’25-Oct’25, while the collection value increased ~18% YoY. During FY25, FAStag toll collections increased 13% YoY. Higher toll collections play a crucial role in expediting the monetization process of road assets by the Ministry. Additionally, toll collections benefit companies that aim to monetize their existing toll assets.

Declining input prices to support margins for contractors

Steel and aluminum prices have decreased ~36% and ~14%, respectively, from their highs in Apr’22. Meanwhile, cement prices have decreased ~16% from their highs in Oct’23. With higher construction activities and stability in commodity prices, road contractors anticipate some improvement in profitability and margins in FY26.

Players with robust order books, strong balance sheets, and diversified operations well placed

Although there has been a slowdown in project awarding in FY24, FY25, and 1HFY26, the tender pipeline is currently robust. Entities with significant order backlogs, strong financial standings, and involvement across diverse sectors are wellpositioned to benefit.

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