Despite the near-term headwinds such as the upcoming general elections that can slow the contract awarding activity, analysts at IDBI Capital remain bullish on the road ahead for the road construction sector.
The fact that construction companies are fully dependent on government for orders makes it an important event for companies in the road construction segment from order book / revenue perspective.
“Going forward, we expect the volatility in awarding activity to reduce and execution to pick up which will benefit most private players. As a result of earnings volatility, we believe that investing in construction companies is more like a steeplechase than a smooth run.