Order flow in the construction and infra sector to improve gradually

According to a report by Dolat Capital Markets Pvt Ltd, new investments announced have increased by 9.1% for the second consecutive month. ₹84200 crores in August. Growth was primarily driven by growth in roads, manufacturing, electricity but was partially offset by declines in irrigation. New investments, announced on a year-on-year basis so far in the fiscal year 2022, grew 104.4 per cent year-on-year to Rs 5,80,200 crore.

However, on a month-on-month basis, new investments in the sector still declined by about 43%.

The report said that a major chunk of new investments in the road segment in August were seen in manufacturing/real estate with a 26.1% share at 24.9%/13.2%. Among states, the high concentration of new investments announced was seen in Gujarat with 11.9 per cent share, followed by Jharkhand with 11.2% share.

Tenders issued also increased by 54.9% year-on-year for the second consecutive month ₹61,800 crore in August, led by Roads/Community/Railways. On a year-on-year basis in FY22, published tenders grew by 7.9% year-on-year ₹2,97,500 crore. The report said that the major tenders have been published in the road, railways and community sectors with 41.5%, 13.5% and 12.4% share respectively. Rajasthan had the highest share of 9.3%, followed by Uttar Pradesh at 8.9%.

In addition, orders placed increased 1.3% year over year ₹39,300 crore led by electricity/water segment which was partially offset by irrigation/mining. Projects awarded on YTD basis in FY22, grew 37.2% year-on-year to Rs 1,53,600 crore.

Electricity, road and railways accounted for 34.9%, 26.1%, 16.4% of the total orders placed in August, respectively. The report said that maximum orders were placed in Karnataka with 10.9% share and Punjab with 6.5% share.