New Delhi, Sep 12 (IANS) Economic activity hit by Covid-19 pandemic may take more time to return closer to normal levels as indicated by the level of tendering and awarding by India Inc. that has fallen again last month after showing some signs of progress in the previous months.
With the gradual lifting of the lockdown, tendering and awarding activity had picked up in July but slipped again modestly in August and was still below the normal run-rate despite a low base from last year (election-related slowdown), according to a research report by Emkay Global Financial Services.
On an year-to-year (YoY) basis, while the orders were up 12 per cent, tenders were down 20 per cent.
The brokerage said that tendering activity picked up only in railways (up 144 per cent yoy), while Irrigation (down 70 per cent yoy), Water Supply (down 40 per cent yoy) and Roads (down 36 per cent yoy) saw a drop. Year till date (YTD) tenders rose 62 per cent mostly due to an extremely favorable base from 1HFY20.
Awarding activity was driven by sectors such as Roadways (up 21 per cent yoy), Real Estate (up 3.5x yoy) and Power Equipment (up 25 per cent yoy). Railways saw a decline of 34 per cent yoy. YTDFY21, awards are down 13 per cent yoy despite a low base from 1HFY20, the Emkay report said.
Among the major orders finalized in August include, Rs 2,600 crore order for supply of six pinaka regiments to the regiment of artillery of the Indian Army awarded to Tata Power and L&T; VPR Mining Infrastructure bagged a Rs 1,300 crore contract for overhead removal for exposing various coal seams, including its drilling, excavation, loading in Ananta OCP, Jagannath Area in Angul district of Odisha.
Among the companies, L&T faces Medium-term pain due to slowing government capex. But this is offset by a likely market share gain and the strong long-term pipeline across water, metro and railways.
KNR Constructions and PNC Infratech have a strong pipeline of DPR-approved and land-ready road projects for ordering in their focus geographies while Kalpataru Power’s balance sheet metric is improving with steady medium-term visibility. It has a strong long-term pipeline of railway and T&D orders.