Infra Sector Check - NHAI Project Awarding Subdued, Hurts Order Inflows: Motilal Oswal

Motilal Oswal Report

Project awarding by National Highway Authority of India stands at 310 km and construction stands at 1,990 km in FY24 year-to-date. The muted awarding by NHAI has hit FY24 order inflows for several road construction companies.

Some companies also reduced their order inflow targets for FY24 due to the slow pace of awarding.

Toll collections have been improving, with FASTag-based toll collections at Rs 419 billion during April-November 2023 and a daily run rate of ~Rs 1.7 billion. In Nov-23, daily average toll collections stood at ~Rs 1.8 billion.

NHAI’s primary focus is on asset monetization as a means to generate funds beyond budgetary allocations. NHAI awarded two toll-operate-transfer bundles, 11 and 12, totaling 400 km, at a cost of Rs 66 billion in Oct-23. For FY24, NHAI aims to achieve a total monetization target of up to Rs 450 billion.

Dedicated Freight Corridor Corporation of India Ltd. revised the timelines for Dedicated Freight Corridor projects, and these projects are now expected to be completed by Dec-24.

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