EPC Tender Announcements Of Rs 8 Lakh Cr To Boost Awards In H2
Awarding activity remained sluggish with Q2FY26 awards down 13 per cent y-o-y and H1 FY26 awards down 27 per cent y-o-y. Highway sector awards slumped to below Rs 10,000 crore in Q2, lowest quarterly award rate in the past five years
Chennai: The government tender awards for Engineering, procurement and construction (EPC) companies in the first half of the financial year was down 27 per cent. However, the surge in tender announcements of Rs 8 lakh crore provides hope of a pickup in awards in the second half of the year.
Awarding activity remained sluggish with Q2FY26 awards down 13 per cent y-o-y and H1 FY26 awards down 27 per cent y-o-y. Highway sector awards slumped to below Rs 10,000 crore in Q2, lowest quarterly award rate in the past five years.
“EPC sector’s wait for acceleration in awards continued in Q2, with H1 FY25 awards down 27 per cent y-o-y. The silver line is the robust increase in tenders announced with H1 announcements hitting a high of Rs 8 lakh crore, lifting hopes of a recovery in H2,” said Krishan Binani, Director, Corporate Ratings, Ind-Ra.
In the highways sector, recent tightening of eligibility criteria considering quality issues and delays, norms of 90 per cent of land availability before awards, better coordination with states for faster execution, are likely to improve the pace of execution when award pace picks up in coming quarters. Tenders announced in the roads sector surged to a multi-quarter high of RS 1.9 lakh crore. The Central Road Ministry has said it has plans to bid out 124 highways and expressways projects worth Rs 3.4 lakh crore in 2025-2026.
The mining segment saw significant award boost in 2QFY26, accounting for over a third of awards. Real estate was the second-largest contributor to awards, although coming off a high base in 1QFY26. Ind-Ra expects award momentum to climb in coming quarters. Railways awards recovered, although the sustenance of this pace is critical for the FY27 outlook. Irrigation contract awards recovered with multiple awards by various state authorities. Power sector awards slumped in the quarter, although it is likely to recover in coming quarters.
Ind-Ra forecasts mid-to-high single-digit revenue growth for the EPC sector in FY26. However, heightened global uncertainty, government’s focus on prioritising consumption, and sector-specific headwinds continue to cloud the prospects of the sector, foreshadowing sluggish revenue and profitability growth in FY26.
