India’s renewed mojo and its attraction as a global destination have principally emanated from one single fact: that its government at the centre has continued for a third term. This has ensured the continuity of reforms and policies without missing a beat in terms of pace. Investors need stability and uninterrupted execution as per plan; this generates confidence. The continuity has also helped in another way: it has allowed the stock markets to avoid shocks caused by the backtracking that often occurs when regimes change. Exuberance in the stock market has allowed large companies to raise capital and keep their debt low; and even small and medium enterprises are aspiring to grow with the availability of equity capital. Availability of resources - in this case capital - which has traditionally been scarce in our economy, has led the economic rally.This has provided an opportunity to the country to place itself where it rightfully deserves to be, i.e., among the top five economic powers of the world. The construction industry has opportunity knocking at its doorstep, but it also faces challenges. India’s infrastructure elasticity is now proven. If you provide infrastructure, it adapts quickly and reaches scale, but when infrastructure fails, its resilience cushions it from breaking down. If plain vanilla EPC construction companies want a piece of assets yielding revenue, then they ought to know the exact extent of their risk appetite: EPC versus HAM or BOT. With a good capital war chest, companies can run SPVs, which can provide them a good IRR over the long term, or they can simply choose to remain strictly EPC and chase high-margin construction contracts. Finally, it has emerged that focusing on the strong suit has its own advantages; developers should focus on risk management while EPC companies should focus on project management. Listed companies have now scaled to Rs.3.6 trillion of operating revenue from Rs.2.8 trillion five years ago, which is not very impressive, reflecting a growth of 29 per cent over five years. However, profits after tax have doubled from Rs.100 billion to Rs.200 billion. Larsen & Toubro, which represents the best that the Indian construction markets have to offer, rose from an operating revenue of Rs.823.84 billion to Rs.1,262.36 billion, a growth of 53 per cent, while profits rose from Rs.54.14 billion to Rs.88.56 billion, a growth of 64 per cent, during the same five-year period. L&T’s order book stands at Rs.4.75 trillion, with 38 per cent from overseas, and it added new orders worth Rs.3 trillion in the last financial year alone. When we compared the market capitalisation of construction companies in June this year, we were pleasantly surprised by the steep increase in valuations. L&T itself had risen by over 70 per cent. Others, like Patel Engineering, grew by 394 per cent, ITD Cementation by 350 per cent, HCC by 294 per cent, Welspun Enterprises by 238 per cent, and J Kumar by 222 per cent. Out of the 27 companies we studied, 18 companies had grown by over 100 per cent. The top three companies contribute 50 per cent of the industry’s operating revenue! The top 10 companies contribute over 70 per cent of the industry’s revenue. The redeeming story this year is that 15 large companies, each with less than `100 billion of operating revenue, are contributing 28 per cent of the operating revenue of nearly Rs.1 trillion. Spending in the first quarter of the current fiscal year has been tepid due to the general elections. For the first five months, the government's capital expenditure, or spending on building physical infrastructure, was Rs.3.01 trillion, or 27 per cent of the annual target, compared to Rs.3.74 trillion for the same period a year earlier. However, it is heartening to see the private sector announcing project capex worth Rs.4.1 trillion in the second quarter ended September 2024, indicating a 42 per cent rise from the previous year, according to CMIE. In addition, the government announced projects worth Rs.1.4 trillion for roads, railways, and other sectors during the second quarter. Manufacturing is showing great signs of making a comeback, with new project announcements worth Rs.3.39 trillion. Land continues to be the biggest problem for the construction industry. More than two-thirds of litigation in the country is related to land. Road construction projects should only be awarded if 100 per cent of the land has been acquired, instead of the current 90 per cent. Huge corridor projects are still stuck at 90 per cent completion. According to the latest reports from the government, more than 90 per cent of the total projects (7,244 projects amounting to `1.45 trillion) undertaken under the Smart Cities Mission have been completed. However, the remaining projects are still under completion. The Western Dedicated Freight Corridor (WDFC), which connects JNPT Mumbai to Dadri in Haryana, is 93.2 per cent complete and is likely to be finished by December 2025. The Maha Samruddhi Marg is expected to be completed next month as it nears its final 76 km. The Coastal Road in Mumbai is likely to be completed by December 2024, as is Mumbai Metro Line 3. The Ram Mandir in Ayodhya is also likely to be finally completed by December 2024 The Delhi-Mumbai Industrial Corridor (DMIC) is strategically built around the Western Dedicated Freight Corridor (WDFC). The WDFC serves as a backbone for the DMIC, facilitating the efficient transportation of goods between industrial hubs along the corridor and major ports in Mumbai. However, both the Dedicated Freight Corridor and the DMIC are “over 90 per cent complete”! The fruits of this development will remain unutilised and provide suboptimal results for our investments, until these projects achieve 100 per cent completion.Prime Minister Narendra Modi and the Cabinet recently approved 12 new project proposals under the National Industrial Corridor Development Programme (NICDP). This decision entails an estimated investment of `286.02 billion and aims to establish a network of industrial nodes and cities. These 12 industrial areas, located across 10 states and planned along six major corridors, are expected to support India's manufacturing capabilities and contribute to economic growth. There should be a timeline for these mega projects, as our large resources remain stuck in projects without an outcome target, and they balloon to the point that they become unsustainable. Throughout 2024, Construction World has covered a variety of topics in line with industry trends. We began the year focusing on affordable housing; then highlighted the Atal Setu, the longest seabridge; scanned Mumbai’s realty scene and explored redevelopment; gathered solutions for the skill shortage in April 2024; gave a heads-up to the booming hospitality opportunities; and observed the technologies behind the tall towers in June 2024. We also revealed the companies that created wealth during the year, identified the most admired construction brands in August 2024, and felicitated India’s top architects and builders. The October issue focuses on RAHSTA (Roads & Highways Sustainable Technologies & Advancements), with road construction being the prime driver of infrastructure development. These are only the cover topics; each issue provides much more to keep you absolutely on top of your game. Construction World’s 27th Anniversary issue is a testament to our commitment to the development of this sector, raising awareness around new technologies, efficient methods, accountability, and sustainability. Once again, we have selected India’s fastest-growing companies through our PerGRO model, and despite multiple jury discussions, we have not yet needed to tweak the mission of finding the fastest-growing construction companies. Our goal is to add more companies to our list with their financials, and we see several rising as the allure of the bourses remains strong. At this juncture, halfway through the fiscal year, the project order flow continues to remain strong. Best wishes for the festivities! PS: My first book Tarmac to Towers – The India infrastructure Story, published by Westland Publishing will be released this month. The book captures the journey of infrastructure in India and explores where we faltered and what we need to do to become a developed nation. Do follow me on twitter and Instagram for updates.