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Roads: Expressway Development on a fast lane

ICICIdirect Research 20 Sep 2024 DISCLAIMER

The government’s outlook for the nation is to have 50,000 km of functional expressways, and at present 4000 km of expressways are already functional with construction work of 6000 km more in progress. The expressway expansion plan is expected to be completed by 2037.

The government has also planned to increase logistics efficiency. By enhancement of the highway network, the government seeks to increase the average speed of a freight truck to more than 90 km per hour by 2047 from 25-40 km per hour currently

In August, the cabinet has cleared the first tranche of eight national high speed corridor projects. The total cost of these projects is estimated to be ₹50,655 crore which will result in the construction of 936 km of highways. Minister of road transport and highways has expressed that another ₹40,000 to ₹50,000 crore of access-controlled projects are in the pipeline and by December a total of ₹2 lakh crore worth of highway projects would be approved.

This opportunity provides a strong growth tailwind for Road EPC players like HG Infra, KNR Construction and PNC Infra, in our coverage universe. We expect the order momentum to kick in from H2FY24 and translate into strong revenue growth in FY26.

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