Will Indian Construction Stocks Build Gains in 2025? Part 1

Sector Growth Outlook Indian construction companies are expected to see modest revenue growth of 1–3% in FY25, mainly due to execution delays caused by general elections, extended monsoon, and a shift to milestone-based billing. Source: ICRA A significant rebound is projected in FY26 with 8–10% growth as stalled projects restart and execution improves post-elections. Source: ICRA Government Spending and Policy Support The Union Budget 2025-26 has raised capital expenditure to ₹11.2 trillion, with a major focus on infrastructure sectors like railways, roads, and housing. Source: GlobalData Investment in public infrastructure is expected to drive long-term demand in the construction sector. Source: ReportLinker Sector-Specific Developments Road construction may face delays due to reduced awarding activity by the Ministry of Road Transport and Highways, but companies with diversified project portfolios are better positioned. Source: ICRA Cement demand is likely to grow 6–7% in FY26, supporting construction-linked stocks due to increased infrastructure and housing activity. Source: Economic Times