EPC companies projected to see 100-200 bps revenue growth

Large engineering, procurement, and construction (EPC) companies are projected to see revenue growth increase by 100–200 basis points to between 9% and 10% this fiscal year. According to analysis by Crisil Ratings of 14 large firms, this growth is being driven by rising investments in the power sector, steady public infrastructure spending, and expanding opportunities in overseas markets.

The power sector is identified as a primary driver, with investments expected to grow by 15–20% this fiscal year. This includes robust capital expenditure in renewables and a revival in thermal power investments to meet baseload demand. Consequently, the order book-to-revenue ratio for large EPC companies is expected to rise to approximately 4.0 times from 3.5 times last fiscal.

While revenue is expected to climb, profitability may face pressure due to commodity inflation and supply-chain disruptions linked to geopolitical developments. However, credit profiles are expected to remain stable due to low leverage and comfortable debt-protection metrics.