June 2022
Sample Size: 40 Companies
Median Rating Value of sample size: BBB+
Individual Parameters Contributing to the Score
Moderate Over Supply
Weak economic outlook aggravated by the ongoing pandemic has undermined demand for this sector; unfinished projects may encounter delays due to capital constraint/below normal demand forecasts. The sector may face some headwinds in terms of its orderbook and revenue pickup till the capex cycle sustainably picks up in the domestic economy.
Neutral
The slowdown in capex over the past 2 years has increased the competitive intensity. The landscape has been generally dominated by established players.
Predictable Regulatory environment
Multiple approvals required in construction projects. Notwithstanding the stringent regulatory environment, the state governments have been competing to attract fresh investments and hence have been adopting a supportive approach to such projects through various fiscal incentives like capital subsidies and tax concessions.
Largely predictable supply of inputs from diversified sources or Raw Materials with rare, occasional disruptions / fairly predictable price band
Adequate availability of raw materials such as cement, steel etc; finance also fairly well accessible for construction equipment and working capital; while labour availability had been a challenge in Q1FY21, it is being gradually addressed with the unlocking of the economy.