India road developers should diversify, says Nuvama

Dilip Buildcon

21/06/2024 10:49

** Indian road developers must work to diversify across
segments since "their ability to win adequate road orders at
desired margins" is "under question", says brokerage Nuvama
        ** Brokerage flags high competition and ordering
activity lull in first two months of FY25
  
    ** Road construction declined 12% y/y in April-May period
with no new projects from National Highways Authority of India
(NHAI) - note
        ** Nuvama says interim budget's 3% y/y rise in road
capex is "muted" and "accentuates the concerns on road awards"
    ** Brokerage prefers PNC Infratech  PNCI.NS  for "robust
balance sheet", stock up 2.2% on the day 
    ** Rivals IRB Infrastructure Developers  IRBI.NS  and Dilip
Buildcon  DIBL.NS  up 0.4% and 0.8% respectively 
    ** Road capex allocation in July budget to "watch out for";
with elections behind, muted road ordering trend seen in FY24
may change by end-FY25 - note

 (Reporting by Hritam Mukherjee in Bengaluru)
 ((Hritam.Mukherjee@thomsonreuters.com;))