The NHAI awarded three road projects covering roughly 127 kilometres in July, nearly double the 66 kilometres awarded in the year-ago period. This followed a sharply subdued June, when only 5 kilometres of projects were awarded. Construction activity rose 3% year-on-year to 232 kilometres in July, though this was lower than the 274 kilometres built in June.
Despite the rebound, a report by Nuvama Institutional Equities stated that the pace lags far behind NHAI’s FY27 target.
NHAI road awards jump after June slump but Nuvama sees challenges ahead
Even with the July rebound, cumulative awarding for the first four months of FY27 stands at just about 234 kilometres. That compares with a reported government target of 5,200 kilometres of awards for the full year, meaning a lot of ground is left for the authority to cover in the remaining eight months. Construction over the same four-month period totals around 870 kilometres, down 27% year-on-year, the report noted.
NHAI FY26 road awards miss target amid execution bottleneck
The authority had missed its full-year awarding target of around 4,500 kilometres for FY26, ending the year with awards of 3,124 kilometres against 4,008 kilometres awarded in FY25. Nuvama attributed the shortfall to delays in project appraisal and approval, along with reluctance among private developers to take up build-operate-transfer projects.
Award values have also declined sharply in recent years. The NHAI’s award value stood at approximately Rs 47,000 crore in FY25, compared with Rs 35,000 crore in FY24, but well below the Rs 1.5 lakh crore and Rs 1.3 lakh crore recorded in FY22 and FY23, respectively, the report said.
On construction, the NHAI exceeded its own internal target of 5,000 kilometres for FY26, building 5,313 kilometres, even though this was 5% lower than the previous year. In FY25, the authority had built 5,614 kilometres, surpassing its target by 9%, despite construction volumes falling around 15% from FY24 due to weak awarding activity in preceding years.
NHAI FY27 road target: 5,200 km award plan faces funding hurdles
Citing a media report, Nuvama said the NHAI plans to award 5,200 kilometres of road projects in FY27, a 66% increase over the previous year, while construction is projected at 4,950 kilometres, a 7% decline.
However, the brokerage flagged that budgetary support for the NHAI has not increased in the FY27 Union Budget, which it said raises doubts about whether the awarding pickup will materialise. The cess component of the NHAI’s budgetary support is projected to fall to Rs 1,22,300 crore in FY27 from a revised estimate of Rs 1,03,400 crore in FY26, though this remains below the Rs 139,800 crore budgeted for FY26. The authority is instead expected to lean more on asset monetisation, including toll-operate-transfer and infrastructure investment trusts, to fund its capital requirements.
Overall capital outlay for the roads sector has been budgeted at Rs 2.9 lakh crore for FY27, an 8% increase over both the budgeted and revised estimates for FY26, following two consecutive years of flat allocations, the report said.
Listed developers’ share in NHAI road contracts falls to 25%
Nuvama also pointed to a longer-term decline in the share of NHAI awards going to listed developers, which fell from about 61% between FY16 and FY18 to around 31% between FY19 and FY21, and further to about 25% between FY22 and FY25. That share remained at roughly 25% in FY26 as well.
The road ahead
At the current run rate, the NHAI has a long way to go. It has awarded just 234 km in the first four months of FY27, against a full-year target of 5,200 km, which means the bulk of the work is still ahead in the remaining eight months.