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India's Metro rail to chart new road to growth for construction cos - Report

Infra News - Published on Tue, 14 May 2019

Image Source: The Economic Times
ET reported that domestic brokerage Edelweiss Securities and a few industry experts estimate under-construction metro rail projects to generate order book of INR 2.5-2 6 lakh crore in the next five years. This would entail investment of INR 3.5-3.6 lakh crore in the same period. It is estimated that 55-60 per cent of this order book is likely to be in construction segment. Of these three categories,, civil construction forms bulk of the order book.

ET Intelligence Group: Underconstruction metro rail projects could be the next trigger for select construction company stocks in the coming quarters as these are likely be the source of strong incremental order book for big contractors in the next five years.

For select large and mid-sized construction companies that stayed away from bidding for roads projects awarded by National Highway Authority of India (NHAI) and Ministry and Road Transport and Highways (MoRTH) or could not secure construction work, this order book could incrementally add to their revenues.

Of the 67 metro projects across 27 cities in India, almost 54 projects are in various stages of development.

The remaining metro rail projects are operational. These stages are under-construction, conceptual, approved and partly operational.

Opportunity Beckons -f

OrderFY20FY21FY22FY23FY24Total I
Civil construction226004940035700341009400151200
Rolling stock0440010700281001550058700

Broadly, the order book from the construction of metro rail projects across 27 cities can be divided into three categories: civil construction (tunnels, bridges and stations), systems (signalling, communication systems) and rolling stock (gauges, locomotives, wagons). Of these three categories, civil construction forms bulk of the order book. Among 27 cities, Mumbai has the largest under-construction metro rail projects covering 295 km.

Among the construction companies, L&T, NCC, J Kumar Projects, Dilip Buildcon, Texmaco Rail and Titagarh Wagons are among the favourites to grab these orders.

Source :

Posted By : Rabi Wangkhem on Tue, 14 May 2019
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