India's infra sector faces revenue, margin pressure in Q4FY25 despite rise in order inflows: Nuvama Research

New Delhi: India's infrastructure sector witnessed a mixed performance in the fourth quarter of FY25, with revenues and profit margins under pressure despite improvement in order inflows, according to a report by Nuvama Research.

The report said the aggregate topline of the top-14 listed infrastructure companies contracted by 4 per cent year-on-year (YoY) in Q4FY25. This decline was mainly due to a lower executable order book and continued payment issues. However, on a sequential basis, revenues increased by 20 per cent quarter-on-quarter (QoQ).

It said "Eroding executable order book and payment issues led to a 4 per cent YoY contraction in aggregate Q4FY25 top line of top-14 listed infra companies".


The report also added that the execution by road EPC companies was severely impacted, with their topline falling 15 per cent YoY. Despite this, the overall sector decline was cushioned by relatively better performance from urban infrastructure players and NBCC.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) margins of infra companies also declined during the quarter. On average, the EBITDA margin fell by 80 basis points (bp) YoY and 30bp QoQ to 10.3 per cent.

On the positive side, order inflows picked up during the quarter, resulting in the book-to-bill ratio (excluding NBCC) improving to 3x, indicating stronger project visibility ahead.

Notably, the report stated that the wagon manufacturers saw their revenues jump 18 per cent YoY in FY25, supported by a healthy 11.5 per cent EBITDA margin.

However, the report also raised concerns over the infrastructure outlook due to muted road awards for the second year in a row and no increase in the FY26 Budget allocations for roads and railways.

The report said "no increase in the budgeted outlay for roads and railways in the FY26 budget makes us cautious on Infra at large".

The report concluded the challenging operating environment, delayed payments, and budgetary constraints are likely to keep overall sentiment cautious for the infra sector in the near term.