Large and diversified engineering, procurement and construction (EPC) companies in India are positioned for a 100-200 basis point increase in revenue growth to 9-10 per cent in the current financial year, according to ratings agency Crisil. The agency's analysis of 14 large EPC companies with revenue of over ₹3.8 lakh crore last fiscal indicates this optimistic outlook. The power sector is emerging as the key swing factor for revenue growth among EPC players, with the order book-to-revenue ratio expected to improve to around 4 times this fiscal from 3.5 times last fiscal.
Power sector investments, which account for nearly a quarter of EPC order books, are expected to grow 15-20 per cent this fiscal. Capital expenditure in renewable energy will remain robust, while thermal power investments are reviving to meet rising baseload demand. Increased spending on transmission infrastructure to address connectivity bottlenecks will provide additional support, making the power sector the primary growth driver for EPC companies this fiscal. Government infrastructure spending is expected to rise a steady 6-8 per cent, broadly in line with last fiscal, and remain the largest contributor to EPC revenues.
Overseas markets will provide the third pillar of growth, with West Asia accounting for 70-75 per cent of overseas order books for EPC companies. The share of overseas orders in total order books increased to around 33 per cent as of March 2026 from around 28 per cent a year earlier. According to Crisil, West Asia has a strong project pipeline across both energy-transition and hydrocarbon sectors, with select large Indian EPC companies well positioned to benefit given their execution track record and cost competitiveness.
While profitability may soften due to commodity inflation and supply-chain disruptions from geopolitical developments, low leverage and comfortable debt protection metrics should keep credit profiles stable. However, operating margins are expected to moderate by 50-70 basis points to 8.2-8.4 per cent this fiscal due to higher prices of key commodities such as cement, steel and bitumen, along with elevated freight and insurance costs. Recent rupee depreciation could partly offset these pressures for companies with meaningful overseas presence.
