- T&D, urban infrastructure, transportation remain key growth drivers
- Labour shortages, sluggish project approvals affect execution
India’s infrastructure and construction sector maintained positive momentum in Q1FY’27, supported by strong order inflows, diversified project pipelines, and continued infrastructure spending. Leading engineering, procurement, and construction (EPC) companies reported healthy order books across transmission and distribution (T&D), buildings, water, transportation, renewables and urban infrastructure. However, labour shortages, sluggish project approvals, slower collections and geopolitical disruptions continued to affect execution.
Strong order inflows support visibility in Q1FY27
Larsen & Toubro (L&T) reported a 14% y-o-y increase in order inflows to INR 1,080 billion, while its order book rose 27% y-o-y to a record INR 7,790 billion in Q1FY’27. International orders accounted for 52% of the order book.
NCC reported order inflows of INR 3,889 crore, led by buildings, water and railways infrastructure, and transportation, taking its order book to INR 81,214 crore. Kalpatru Projects International Ltd (KPIL) secured INR 7,668 crore of orders, with its order book reaching a record INR 66,607 crore in Q1FY’27.
KEC International reported order intake of INR 6,408 crore, while its order book, including L1 orders, exceeded INR 40,000 crore, with T&D accounting for over 60%. Afcons Infrastructure reported quarterly order inflows of INR 13,219 crore, taking its order book to INR 43,290 crore.
Revenue growth remains steady during Q1
Revenue growth remained positive across the companies, reflecting continued execution of existing projects. L&T’s revenue increased 7% y-o-y to INR 679 billion, while NCC’s revenue rose 12% to INR 5,842 crore.
KPIL reported 4% y-o-y revenue growth to INR 6,408 crore, while EBITDA increased 7% y-o-y to INR 562 crore, supported by disciplined execution and improved operating efficiency. KEC International’s revenue increased 9% to INR 5,482 crore.
The strong order books provide revenue visibility for the coming quarters, although the pace of conversion will depend on execution conditions.
T&D remains a key growth driver
Transmission and distribution (T&D) continues to be a major source of sector growth, particularly as power transmission requirements rise alongside infrastructure and renewable energy development. KEC’s T&D business accounts for more than 60% of its order book, while KPIL and L&T also secured significant T&D orders during the quarter.
Buildings, transportation, water, renewables, and urban infrastructure are providing additional diversification. Afcons’ order book remains spread across surface transport, marine and industrial, urban infrastructure, and hydro and underground projects.
Large tender pipelines support FY’27 prospects
Future bidding opportunities remain substantial. KEC has a tender pipeline exceeding INR 2 lakh crore, evenly split between T&D and non-T&D opportunities. Afcons has identified an INR 1.5 lakh crore FY’27 bid pipeline, with around 75% domestic opportunities and a focus on urban infrastructure and marine & industrial projects.
L&T’s near-term addressable opportunity pipeline stands at around INR 15 trillion, providing additional support to medium-term order prospects.
Execution challenges remain
Despite strong order visibility, execution remains the key monitorable. KEC’s Q1 performance was affected by the West Asia crisis, labour shortages and slower execution in water projects. L&T also faced supply-chain disruptions in its solar business.
NCC highlighted project approvals, land availability, and utility shifting as execution challenges, while Afcons remains exposed to execution delays, working capital intensity, and overseas risks.
These factors could influence the pace at which order books translate into revenue and margins during FY’27.
Outlook
The sector is expected to maintain positive momentum in Q2FY’27, supported by strong order books, government-led infrastructure spending, and healthy tender pipelines. T&D, urban infrastructure, transportation, renewables, and buildings are likely to remain key growth areas. For FY’27, robust order visibility should support revenue growth, although execution constraints, labour availability, working capital requirements, and geopolitical or supply chain disruptions remain key risks. Overall, the outlook remains positive, supported by diversified order books and sustained infrastructure investment.
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