BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
HDFC Securities Institutional Equities
Despite strong ordering momentum, we are seeing emergence of headwinds to the Indian highways program. Substantial dilution of bid qualification has exposed the sector to low quality, inadequately funded developers taking large order inflow market share. This has the potential of de-railing the national highway program, creation of sub quality infrastructure, time and cost overruns and eventually higher cost to completion and defaults.
Financial institutions are playing at the party with reckless sector lending, benchmarking the developer’s risks under the garb of National Highway Authority of India AAA rating.
We remain cautiously optimistic as hybrid annuity model projects are being bid like engineering, procurement and construction projects, which shall lead to equity shortfall and execution delays. EPC players with strong balance sheets, conservative bidding stance, and secured funding stand to outperform as the dust settles.
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