Construction Sector Q2 Earnings Preview - Modest Growth Expected In A Seasonally Weak Quarter: Nirmal Bang
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Nirmal Bang Report
Heavy monsoon in various parts of the country, especially in September 2021 is likely to keep execution in check in a seasonally weak quarter for the road construction companies.
For our coverage universe, we are building in 12% YoY growth in revenue for Q2 FY22E.
Higher commodity prices, especially that of steel, cement and tar, are likely to keep Ebitda margins in check.
Overall, we are building in 165 basis points YoY contraction in Ebitda margins for the sector.
Both awarding as well as construction activities from National Highways Authority of India/Ministry of Road Transport and Highways has been good so far in FY22.
Till August 2021, the road Ministry has constructed 3,355kms of roads compared to 3,322kms last year.
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