en.Wedoany.com Reported - The National Highways Authority of India (NHAI) awarded the lowest number of highway projects in seven years during the fiscal year ending March 2026 (FY2026), marking a significant slowdown in the country's road construction pace. Data from Nuvama Institutional Equities shows that NHAI awarded contracts for 3,124 km of road projects worth Rs 423 billion in FY2026, higher than the 2,170 km (worth Rs 470 billion) in FY2025, but far below the peak of 6,300 km and nearly Rs 1.3 trillion in FY2023.

When including state-level projects, the combined awards by NHAI and the Ministry of Road Transport and Highways (MoRTH) in FY2026 stood at 7,000 km, down from 7,538 km in FY2025, a year-on-year decline of 7%, and well below the over 12,000 km recorded in FY2022-23. The report indicates that persistent delays in land acquisition are the primary drag factor, with progress lagging behind the approval process. Overall, total road construction in FY2026 fell by 12% year-on-year, following a 14% decline already recorded in FY2025.

The construction slowdown has had a structural impact on related supply chains, such as commercial vehicles and engineering equipment. Nuvama's analysis shows that the share of listed developers in NHAI awarded orders has been steadily shrinking, from approximately 61% in FY2016-18 to 31% in FY2019-21, further declining to 25% in FY2022-25, and remaining at 25% in FY2026. Meanwhile, smaller unlisted companies have secured a larger share of projects, reducing revenue visibility for listed developers.

In FY2026, NHAI's capital expenditure remained largely flat at Rs 2.4 trillion, but its construction output fell by about 5% to 5,313 km, indicating a reallocation of funds. Asset monetization raised approximately Rs 283 billion in FY2026, slightly lower than the previous period, with most proceeds used for debt repayment. The authority's debt-to-equity ratio has dropped to 0.17 times.

The report suggests that a recovery in awards in the near term is unlikely, given the bleak outlook for road spending in FY2027 and NHAI's prioritization of deleveraging over expansion. Nuvama advises road developers to seek diversification into niche segments, as their ability to secure new orders at desired profit margins remains uncertain. The institution maintains a cautious stance on the road sector overall, citing weak project pipelines and potential knock-on effects on related industries.