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Icra Forecasts 8.5-9% Growth In Indian Construction Sector With Emphasis On Infrastructure Development

In FY2024, Indian construction is expected to grow by 8.5 to 9% as a result of government focus on infrastructure. Despite obstacles like the price of high-speed rail, there are strong orders and room for growth in margin.

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Icra Forecasts 8.5-9% Growth In Indian Construction Sector With Emphasis On Infrastructure Development

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  1. Icra Forecasts 8.5-9% Growth In Indian Construction Sector With Emphasis On Infrastructure Development In FY2024, Indian construction is expected to grow by 8.5 to 9% as a result of government focus on infrastructure. Despite obstacles like the price of high-speed rail, there are strong orders and room for growth in margin. If you are a cement buyer, private or government contractor, in India, wishing to buy cement in bulk (all brands), then Tradologie.com, is the right platform for you. On the platform, you can procure the best quality materials such as to buy bulk TMT Bars, buy ACC blocks in bulk at the lowest prices possible directly from manufacturers in the market and reduce your raw material costs. Nation’s Infrastructural Growth The rating agency Icra predicted in a report that the government's ambitious infrastructure agenda would propel the Indian construction industry to grow at a rate of 8.5 to 9% in FY2024, in the midst of the impending general elections. Interestingly, Q2 FY2024 saw a 13.3% YoY increase, which was ascribed to effective execution and a decrease in raw material prices as opposed to 7.9% in Q1 FY2024. Although this represents a minor change from the over 10% growth in FY2023; it still significantly exceeds the long-term average of 5.3% from FY12 to FY23. The report also emphasized the industry's gravity, pointing to H1 FY2024 order book-to-billing ratio of 3.2 and robust order book inflows. According to projections, the construction sector's margins could improve by 50–100bps in FY2024. This would be due to a predicted 18–20%increase in revenue, the benefits of operating leverage that would follow, and moderate commodity prices.

  2. Effect Of High-Speed Rail Corridor In the meantime, the study noted that although there have been early setbacks, the Mumbai- Ahmedabad high-speed rail corridor—a crucial project in India's infrastructure story—is progressing significantly. The project is moving forward with 99.9% right-of-way availability, 100% civil contract allocation, and 69% of track-related contracts awarded. Icra, however, projects a significant cost increase of 75% to Rs 1.9 lakh crore, delaying operational readiness until CY2029. The report also stated that strong execution momentum, steady operating leverage gains, and stable raw material prices are all expected to boost overall profitability. This positive outlook is backed up by strong coverage metrics, such as an interest cover that is expected to remain above 4.0 times in FY2024 and FY2025. Tradologie.com is the world’s first digital trade hub through which one can buy branded construction commodities in bulk such as steel, cement, plywood, etc., directly from manufacturers and brands at the best price and assured qualities. To register as a buyer, click here. To register as a seller, click here. To stay updated with the latest happenings in the agro-trade industry, follow Tradologie.com across all social media channels.

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