Contracts worth Rs 2,05,773 crore were awarded during the first quarter of fiscal year 2023-24, as per the latest findings of Projects Today. These contracts were spread across 1,386 projects and were secured by 1,019 companies representing various key sectors.
A quick look at the historical trends, indicates that the total number of contracts awarded in Q1/FY24 would undergo upward revisions in the next few months as more data becomes available. This bodes well for the overall project investment outlook.
During this quarter, 27 mega project contracts, each valued at Rs 1,000 crore and above, were awarded, totaling Rs 1,27,047.54 crore. These mega contracts accounted for around 61.74 percent of all contracts awarded during this period.
The Services & Utilities (Infrastructure) sector, encompassing Transport and Social infrastructure sectors, dominated the contract value with a significant share of 72.22 percent during the first quarter of FY24. This sector witnessed the finalization of 1,138 contracts worth Rs 1,48,617.09 crore. Key sub-sectors such as Railways, Roadways, Telecom Services, Water & Sewerage Pipeline & Distribution, Community Services, Other Shipping Infrastructure, and Real Estate performed exceptionally well, accounting for approximately 54 percent of the total contract value awarded in Q1/FY24.
The Railways sector recorded a remarkable surge with 69 project contracts worth Rs 58,775.85 crore awarded. The increase was attributed to the government’s initiative to promote local production of Vande Bharat trains.
In the Roadways sector, 433 new contracts amounting to Rs 28,031.57 crore were awarded in Q1/FY24. This highlights the government’s focus on developing inter-corridor connections, coastal routes like the Mumbai Coastal Road Project, and expanding connectivity roads and expressways, with major contracts aligned to these objectives.
The Telecom Services sector saw 11 new contracts awarded, valued at Rs 19,899 crore, riding high on the proliferation of broadband and telecom connectivity across the country.
The Water & Sewerage Pipeline & Distribution sector received a major boost with 204 project contracts worth Rs 13,587.81 crore awarded. Notably, Afcons Infrastructure secured a major contract worth Rs 786.51 crore from City and Industrial Development Corporation of Maharashtra (CIDCO) to construct an 8.65-km-long treated water tunnel and associated works in Maharashtra.
Other key sectors such as Community Services, Real Estate, and Other Shipping Infrastructure also witnessed substantial contract awards.
Moving to the Manufacturing sector, 51 project contracts were awarded with a total value of Rs 27,205.26 crore during the first quarter of fiscal year 2023-24, representing 13.22 percent of the total contracts awarded during that period.
In the Railway Wagon & Equipment sector, two contracts with a combined value of Rs 12,891.19 crore were awarded. One notable contract in this sector was secured by Ramkrishna Forgings in consortium with Titagarh Wagons, amounting to Rs 12,226.5 crore, to manufacture and supply forged wheels to Indian Railways under the ‘Aatma Nirbhar Bharat’ initiative.
The Aircraft sector saw the finalization of three new contracts worth a cumulative Rs 9,805 crore, with Bharat Electronics securing a significant contract of Rs 3,914 crore from Bharat Dynamics for the supply of the improved Akash Weapon System (AWS).
In the Nitrogenous Fertilisers sector, a single contract worth Rs 960.71 crore was awarded to Larsen & Toubro (L&T) by Chambal Fertilisers & Chemicals, involving the establishment of a new plant in Rajasthan for the manufacture of Technical Ammonium Nitrate.
The Mining sector accounted for 5.62 percent of the total share of projects-related orders, with 33 contracts awarded, totaling Rs 11,571.44 crore.
In the capital-intensive Coal sector, 22 contracts were finalized with a total value of Rs 10,677.77 crore. R K Transport secured a mega contract worth Rs 8,498.51 crore from Eastern Coalfields for the development and operation of the Itapara Open Cast Project (OCP) in West Bengal.
In the Petroleum Oil & Gas sector, ten new contracts were assigned during the period, including Engineers India securing a contract from Oil & Natural Gas Corporation (ONGC) for the replacement of compressors and related works.
The Irrigation sector saw a large number of contracts awarded in Q1/FY24, with 102 contracts valued at Rs 10,401.86 crore. Notable contracts include Rail Vikas Nigam (RVNL) in JV with SCC Infrastructure securing a significant contract worth Rs 2,248.95 crore from the Water Resources Department, Rajasthan, for the planning and construction of irrigation facilities.
The Electricity sector witnessed the awarding of 62 contracts with a combined order value of Rs 7,977.84 crore, representing 3.88 percent of the total share. In the Solar-based Power sector, 22 new contracts worth Rs 6,726.6 crore were awarded, with Gujarat Urja Vikas Nigam (GUVNL) awarding three major contracts worth Rs 5,800 crore. In the Coal/Lignite Based Power sector, 21 new contracts were finalized during Q1/FY24, with L&T securing a notable contract for the Talcher Thermal Power Plant in Odisha.
A single contract was awarded in the Gas Based Power sector, and the Wind Based Power sector saw the finalization of 15 new contracts, indicating potential growth opportunities as the government plans to develop offshore wind energy.
In conclusion, the first quarter of FY24 witnessed an impressive number of contract awards across various sectors, signaling a positive trend in project investments in India. As the government continues to prioritize infrastructure development and renewable energy initiatives, further contract awards are expected in the coming months, paving the way for significant growth and capacity-building in key sectors.
