The engineering, procurement, and construction (EPC) sector in India is entering a new phase of sustained growth, with Crisil Research projecting revenue expansion of 9-11% in FY26 for large, diversified EPC companies. This comes on the back of steady infrastructure investments, robust order pipelines, and improving execution capabilities, setting the stage for continued momentum in one of India’s most critical industries.

EPC Revenue Growth Outlook

According to Crisil’s latest analysis, large EPC companies registered revenue growth of 8.3% in FY25, a slowdown compared to the impressive 20% CAGR recorded during FY22-24. This moderation was attributed to the high base effect, in line with the 6% growth in infrastructure capital expenditure (capex) during FY25.

Looking ahead, FY26 is expected to be stronger, with revenue growth projected at 9-11%. This acceleration will be supported by a 7-9% increase in infrastructure capex, driven primarily by sustained government allocations at both central and state levels, along with a modest pickup in private sector participation.

Public and Private Capex Driving Growth

Infrastructure continues to dominate India’s investment landscape, making up nearly 75% of the country’s total capex. Within this, public sector expenditure remains the backbone, but the private sector’s role is set to increase.

In FY25, private players accounted for 9% of overall infrastructure capex, but this share is projected to rise to 11% in FY26. The key drivers for private investment include the revival of build-operate-transfer (BOT) projects in roads and a surge in renewable energy investments, particularly solar and wind projects. These factors are expected to give large EPC firms fresh opportunities across diverse segments.

Robust Order Books and Overseas Growth

Crisil’s study of 15 leading EPC firms with a combined annual revenue of Rs. 3,15,000 crore (US$ 35.9 billion) in FY25 revealed that the sector is operating with healthy order books. The order book-to-revenue ratio improved to 3.7 times in March 2025, up from 3.5 times a year earlier, reflecting strong demand visibility over the medium term.

An important trend has been the growing contribution of overseas orders. In March 2025, international projects accounted for 27% of total order books, compared to 23% in March 2024 and just 16% five years ago. This indicates that Indian EPC companies are increasingly competitive in global markets, particularly in Middle East infrastructure projects, renewable energy developments, and large-scale industrial construction.

Profitability and Margins

Beyond top-line growth, profitability for EPC companies is also on an upward trajectory. Crisil estimates that operating margins will improve to around 9.5% in FY26, aided by stable commodity prices and the completion of legacy low-margin projects.

The stabilisation of raw material costs, including steel and cement, is providing much-needed relief after the volatility of recent years. Moreover, as older contracts with lower profitability get phased out, companies are now focusing on better-quality order books with improved terms, strengthening the bottom line.

Structural Factors Supporting EPC Growth

The medium-term outlook for EPC companies remains robust due to several structural factors:

• Government infrastructure push – Large allocations in Union and State budgets for highways, railways, airports, and renewable energy projects.

• Diversified order mix – Companies are balancing domestic and international projects across transportation, energy, and industrial segments.

• Execution efficiency – Faster project completions and digital adoption are driving productivity and reducing delays.

• Financial stability – With order visibility and better cash flows, large EPC companies are better placed to manage working capital requirements.

EPC and India’s Growth Story

The EPC sector’s performance is closely tied to India’s infrastructure growth agenda, which plays a pivotal role in achieving broader economic targets. As India aims to become a $5 trillion economy, infrastructure creation through EPC companies remains one of the cornerstones of development.

With improved private participation, revived road projects under BOT, and a strong pipeline of renewable energy initiatives, EPC companies are well-positioned to capture new opportunities. The increasing share of international projects further adds resilience and diversification to their growth outlook.

Conclusion

Crisil’s projection that large EPC companies will grow revenues by 9-11% in FY26 underscores the sector’s resilience and importance to India’s economy. With robust order books, improving margins, and both public and private capex backing, EPC firms are expected to maintain healthy growth momentum.

The sector’s expanding global footprint, alongside strong domestic demand, will ensure that EPC companies remain at the heart of India’s infrastructure growth journey. As operating conditions improve, large players are likely to benefit the most, consolidating their leadership in both domestic and international markets.

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