Liquidity crunch and labour shortage are the two major constraints for the construction sector even as the nationwide lockdown is easing in a phased manner. Given this, companies which earn revenues from tolling of projects and executing own projects instead of pure construction companies are better placed than the pure play construction companies.
According to industry estimates, labour shortage is as high as 50% in the case of some construction projects. This has caused execution delays thereby increasing project costs, which will be borne by the construction companies. Analysts believe that companies which have a right balance of construction and build, operate, and toll projects, have limited downside in terms of cost escalation and loss of revenues.
