Cash flow for construction sector to improve in FY17 - Feedback

Cash flow for construction companies is likely to improve in 2016-17 as most of the orders procured in the last two years are expected to be executed this fiscal, says a study by India Ratings (Ind-Ra).

According to the study, companies in the construction sector continued to witness negative cash flows from operations in 2015-16, which is likely to improve gradually to near zero levels this fiscal as more orders procured during the last two years are executed. “Competitive intensity had reduced for new orders over the last two years and hence margins on such orders are expected to be higher,” the ratings agency said. Order inflow in the construction sector is likely to grow as the government has increased outlay for highways and railways in the Union Budget 2016-17.

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