Infra players to gain from strong order momentum

THE COMPASS

- DEVANGSHU DATTA

One of the side effects of the general elections was government tenders slowing down. Activity across Infrastructure sectors suffered.

Infra activity started to recover in H2FY25 followed by another slowdown due to unseasonal rains in HiFY26.

The FY26 Budget remains supportive with allocations being maintained. Cumulative year to date (YTD) FY26 capex remains 33 per cent higher year-on-year (Y-0-Y).

To achieve FY26 budgeted capex of %11.2 trillion, another 77 trillion must be generated in the next eight months. The trends show roads contracting 15 percent Y-0-Y (35 percent share), railways expanding 9 per cent Y-0-Y (33 per cent share), and defence posting 67 per cent Yo-Y growth (10 per cent share).

Materials like cement, steel, copper and other industrial metals could see rising offtake. Margins will be good since global commodity prices are low. Aluminum, zinc, rebar prices have eased since March 2025 while copper has been flat. Risks and concerns include slowdowns in execution, rise in commodity prices, increases in receivables and working capital, and increase in promoter pledges, among others.