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The domestic construction equipment industry is expected to achieve 2-4 per cent volume growth over the next two fiscal years due to slower real estate and road activity. Revenue is projected to rise 6-8 per cent, supported by selective price increases and stable steel prices, which help offset compliance costs. Operating margins are expected to contract slightly to around 11 per cent. Domestic sales dominate the market, while exports continue to provide additional revenue. Careful capital expenditure is likely to maintain stable leverage and credit profiles across companies.
The domestic construction equipment industry is projected to record 2-4 per cent volume growth this fiscal year and the next, reflecting subdued demand in the domestic market due to moderating real estate activity and slower road construction, according to Crisil Ratings. Advertisement
Revenue growth is expected to be higher, at 6-8 per cent over the same period. Crisil explained that selective price hikes will partially offset rising compliance costs, helping companies maintain steady revenues despite market pressures.
Stable steel prices and firm export realizations are anticipated to ease the impact of low-cost imports, keeping operating margin contraction limited to around 11 per cent, compared with approximately 12 per cent last fiscal year.
A disciplined approach to capital expenditure is expected to keep leverage under control and maintain stable credit profiles across companies in the sector. Crisil?s assessment included 17 manufacturers, covering nearly three-fourths of the industry?s total volume.
Construction equipment sales are primarily driven by sectors such as roads, mining, and real estate, with additional demand from railways, water supply, and power projects. Within the product mix, earthmoving machinery leads with 70 per cent of total volume, followed by material handling equipment at 12 per cent, concrete equipment at 10 per cent, road equipment at 5 per cent, and material processing equipment at 2 per cent.
Domestic sales accounted for roughly 90 per cent of total construction equipment volume in FY25, with exports making up the remaining 10 per cent. The industry continues to rely heavily on infrastructure projects, while exports provide additional revenue support.
Source PTI
5th Jun, 2025
25th May, 2023
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