NHAI gives away fewer projects in FY24, but tender pipeline stays robust: MOSL

Though project awarding was below expectations during FY2024, according the analysts, awarding is expected to pick up from FY2025 after the general elections.

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26 Aug, 2025 12:21

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The FY2024 order inflows for several road construction companies were impacted by muted awarding by the National Highway Authority of India (NHAI), according to a report by Motilal Oswal.

Some of these companies also reduced their order inflow targets for FY2024 due to the slow pace of awarding, it said.

Also read: NHAI puts new toll rates on hold ahead of Lok Sabha elections: Report

For FY2024, HAM (Hybrid Annuity Model) and EPC (Engineering, Procurement and Construction) projects accounted for over 40 percent of the total projects (a length of around 2,500 km). According to the report, road construction activities gained momentum in Q4 of FY2024 - NHAI completed 6,644 km against 4,882 km in FY2023.

Another area with improvement, according to the report, was FASTag toll collections, which grew 13 percent on-year during Q4. "Higher toll collections play a crucial role in expediting the monetisation process of road assets by the ministry. Additionally, toll collections are beneficial to companies seeking to monetise their existing toll assets. Asset monetisation in focus for NHAI," the report said.

In FY2024, the NHAI's focus was on asset monetisation, analysts noted, with the NHAI's total asset monetisation programme as of March 2024, crossing Rs 1 trillion. This includes around Rs 156.3 billion raised in February 2024 through 'InVIT Round-3' by "monetising 10 national highway stretches".

Also read: NCLAT directs NHAI not to terminate concession agreement of IL&FS group entity

Though project awarding was below expectations during FY2024, according the analysts, awarding is expected to pick up from FY2025 after the general elections. The report adds that despite the slowdown, there have been certain players with "strong order books, balance sheet strength, and diversified operations" that are well placed to benefit from the NHAI's proactive approach to project allocation in FY2025.

MOSL's top pick from the sector is KNR Constructions Ltd (KNRC).

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