New Delhi: The ratings agency said the outlook on the construction sector in FY22 is stable and credit profile of players are likely to recover after weakening in FY21.
Besides, ICRA pointed out that investments planned under the National Infrastructure Pipeline will be key growth drivers for the sector.
“While the pandemic-related uncertainties continue to remain, execution has recovered sharply in the last few months.
“ICRA expects the pace of execution to improve over the medium term, supported by adequate orders in hand as well as the recent measures taken by the government,” it said.
As per the ratings agency, the order book position of most construction players is currently adequate, which provides medium term revenue visibility.
ICRA expects the new order inflows for construction companies to remain healthy in FY2022.
“However, delays in land acquisition, funding issues, and state government priorities remains key risks to the new order inflows.”
“The order inflows from non-infrastructure segments like industrial and real estate is expected to remain muted, with weak private sector capex growth.”