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Sector

Construction sector explained

Companies that build roads, bridges, railways, metro lines, power plants, factories and buildings, mostly under contracts from governments and businesses.

For learning only. Cityfort is not a SEBI-registered adviser and does not recommend buying or selling any security. Prices shown are dated and may be out of date.

Companies we cover

1 company in Construction

  • L&T

    LT

    Larsen & Toubro builds infrastructure and energy projects in India and abroad, and owns IT and lending businesses; FY26 revenue was ₹285,874 crore, a quarter of it from Saudi Arabia.

    Data depth: RichCovers Q1 FY27

How companies in this sector earn

How do Construction companies make money?

  • Contractors win projects through bids and are paid in stages as the work is completed.
  • The order book, meaning signed work not yet done, shows how much future revenue is lined up.
  • Steel, cement, bitumen, diesel and labour are the biggest costs.
  • On fixed-price contracts, the builder bears rising costs unless the contract allows prices to be adjusted.
  • Some firms also build and run roads themselves, earning tolls or fixed government payments.

Who regulates it

Ministry of Road Transport and Highways (MoRTH) · National Highways Authority of India (NHAI) · Ministry of Railways · Ministry of Housing and Urban Affairs

What moves results across the sector

  • Government capital spending in the Union Budget, and how much of it is actually spent during the year.
  • New contracts awarded by NHAI, the railways, metro agencies and state governments.
  • Prices of steel, cement, bitumen and diesel.

Words you'll meet

Key terms

Order book
The value of signed contracts that have not yet been carried out.
Order inflow
The value of new contracts won in a period.
EPC
Engineering, procurement and construction: a contract where the builder designs, buys materials and builds for a fee.
Hybrid annuity model (HAM)
A road contract where the government pays part of the cost during construction and the rest in instalments later.
Book-to-bill
The order book divided by a year's revenue, showing how many years of work are in hand.

Key facts

Construction in numbers

How much does the central government spend on capital projects?
The Union Budget 2026-27 estimates central government capital expenditure of ₹1,221,821 crore for FY27, against ₹1,095,755 crore (revised estimate) for FY26 and ₹1,051,953 crore (actual) for FY25. (Source: Ministry of Finance, Government of India)
How long is India's national highway network?
India's national highway network was 146,572 km in FY26 (up to December 2025), against 91,287 km in FY14, per the Economic Survey 2025-26, citing the Ministry of Road Transport and Highways. (Source: Ministry of Finance, Government of India)

Sources

  1. Budget at a Glance 2026-27, Ministry of Finance, Government of India, 1 Feb 2026
  2. Economic Survey 2025-26, Chapter 9: Investment and Infrastructure, Ministry of Finance, Government of India, 29 Jan 2026

Last updated 25 Oct 2026.

Disclaimer

For learning only. Cityfort is not a SEBI-registered adviser and does not recommend buying or selling any security. Prices shown are dated and may be out of date.

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Cityfort publishes educational content that explains how listed companies work. Cityfort is not registered with the Securities and Exchange Board of India (SEBI) as an Investment Adviser or Research Analyst and does not provide investment advice, recommendations, ratings, price targets or any opinion on whether to buy, sell or hold any security.

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