Crisil,the rating agency said on Tuesday said that mid-sized enterprises in the engineering, procurement, and construction (EPC) sector grow by 15 per cent this fiscal. The expected growth will be up from around 10 per cent fall last fiscal. The aggregate revenue of these 600 companies (with revenue less than Rs 1,000 crore in the previous FY) in road construction, commercial and industrial buildings, irrigation, and allied activities was estimated to be Rs 70,000 crore for the last fiscal year
However, the performance of these EPC companies is likely to be curbed in the first quarter of the current fiscal year sequentially as the country fights the second Covid wave along with challenges such as the slowdown in project execution and labour migration. Nonetheless, the impact will be less severe from last year given that “activities had ground to a halt amid a nation-wide lockdown in the first quarter of last fiscal,” Crisil said. Importantly, the government had exempted the construction sector from lockdowns so far this fiscal even as on-site stay arrangements for labourers and pandemic-related precautions have reduced migration to around 20 per cent this year so far, it added. Further, most project sites are in non-urban locations, which have been less impacted by the pandemic compared with the urban areas.
Nonetheless, representative of construction companies differed from the projected growth. “There seems to be a misconception as everything seems to be in a downturn. The labour is not available while the prices for steel, cement, etc., have been going up without any reason. What you will do with the order book if nothing is moving at the site. Practically, it is not only 20 per cent of workers that are going back. There is a mass labour movement from cities like Mumbai. But it is true that businesses are more prepared this year from last year and there can be some changed behaviour,” Raju John, Director General, Builders’ Association of India told .
