EPC road contractors face slower revenue growth: CRISIL SME Tracker

CRISIL expects small and medium (SME) road contractors, which account for about half of the engineering, procurement and construction (EPC) roads industry, to see revenue growth moderate in the two years through fiscal year 2021.

At 10-11 per cent, the compound annual growth rate over these two years would be at least 200 basis points lower, compared with about 13 per cent in the three years through fiscal year 2019.

This is mainly due to lower investments in rural roads via the Pradhan Mantri Gram Sadak Yojana (PMGSY) and moderation in awarding by the National Highways Authority of India.

Rural road projects are typically awarded under the centrally-sponsored PMGSY or state schemes such as Mukhya Mantri Gram Sadak Yojana, and being smaller in size, are mostly executed directly by SME EPC contractors.