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ICRA maintains negative outlook for construction sector

However, as the coronavirus impact subsides and activities come back to normalcy, strong order flow under the National Infrastructure Pipeline, focus on infrastructure, and lower execution impediments should help in recovery, Icra added.

April 10, 2020 / 10:19 IST
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Ratings agency Icra has maintained negative outlook for the construction sector for the near term, with revenues and order flows being significantly impacted in Q1 of the current fiscal due to the COVID-19 crisis.

However, as the coronavirus impact subsides and activities come back to normalcy, strong order flow under the National Infrastructure Pipeline, focus on infrastructure, and lower execution impediments should help in recovery, Icra added.

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"COVID-19 is expected to cause short term disruption to the sector with situation likely to normalize by Q2 once the disease is contained. "However, the onset of monsoon in the second quarter of the fiscal could further push the growth to fourth quarter of FY2021," its Assistant VP Abhishek Gupta said in a media conference call.

According to Icra, FY20 revenue impact due to COVID-19 is estimated at 2-4 per cent, with Q4FY20 impacted by as much as 8-10 per cent since execution is typically higher in March month.