The Union Budget 2025, set for February 1, has drawn attention to road construction stocks. Analysts predict the road sector will benefit greatly from budget allocations due to the government’s infrastructure focus. Over the last five years, India’s road network grew by 59%, making it the second largest globally with 1.46 lakh kilometers of national highways.
For FY 2024-25, the Ministry of Road Transport and Highways received Rs 2.72 lakh crore. By December 2024, they spent an estimated Rs 1.75-1.8 lakh crore. Project awarding slowed to 2,500 kilometers, down from 3,100 kilometers the previous year.
Analysts expect a 5-6% increase in Gross Budgetary Support, reaching Rs 2.85-2.9 lakh crore. The government plans to focus on Build-Operate-Transfer (BOT) projects, with 15 projects worth Rs 44,000 crore in the pipeline. The Bharatmala Pariyojana initiative aims to complete the remaining 4,182 kilometers under Phase-I.
The National Highways Authority of India (NHAI) has a debt of Rs 2.8 lakh crore. The budget may introduce measures to encourage asset monetization to fund new developments and ease financial strain. Despite challenges like land acquisition and regulatory hurdles, infrastructure and EPC companies are expected to benefit from increased spending.
Overall, the upcoming budget is set to boost the road construction sector, with companies like G R Infraprojects, KNR Constructions, PNC Infratech, and Dilip Buildcon likely to gain.
