Indian Construction equipment industry sees 25pc increase in growth this fiscal

The Indian construction equipment industry has continued its strong growth trajectory, posting a 25 per cent increase in the fiscal year that ended on March 31, 2024. This marks the second consecutive year of double-digit growth, with industry volumes reaching a new peak in the post-Covid period.
Total industry volumes reached about 1,35,000 units, including both domestic and export sales, in FY24, up from about 1,08,000 units in FY23.
“The growth in FY24 was driven by sub-segments such as earth moving, material handling and concrete equipment, although the road construction segment experienced a slight slowdown. After witnessing a significant drop during the pandemic year, the industry has shown resilience by bouncing back strongly in the past two years,” Chairman & Managing Director of Schwing Stetter India VG Sakthikumar, who is also part of the Governing Council of Indian Construction Equipment Manufacturers’ Association (ICEMA), told businessline.
Domestic volumes are reported to have crossed the one lakh mark, reaching close to 1,10,000 units, up from 99,735 units in FY23. This growth follows a 26 per cent increase in total volumes in FY23, rebounding from an 8 per cent decline in the previous fiscal year due to the impact of the pandemic.
Looking ahead, original equipment manufacturers (OEMs) are expected to incur a capex of ₹1,400-1,500 crore during FY25. This investment will be directed towards debottlenecking, product development initiatives (such as CEV-V compliant equipment and alternative fuel-driven powertrains), and localisation initiatives, according to ICRA (Investment Information and Credit Rating Industry)
However, the rating agency expects the mining and construction equipment industry to experience a decline of 12-15 per cent in FY25, primarily due to a likely slowdown in sales in the first half of the fiscal. This slowdown is attributed to a disruption in project award activity during two consecutive quarters (Q4 FY2024 and Q1 FY2025e) amid the Parliamentary Elections and monsoon-related impact on construction activities.
“The industry is expected to see a ramp-up in volumes in the second half of FY25, aided by an increase in new project awards starting from Q3 and partly supported by pre-buying due to the CEV-V 3 emission norm transition in January 2025 (deferred from April 2024),” said Ritu Goswami, Sector Head, Corporate Ratings, ICRA.
However, the industry may see a decline of 12-15 per cent (which translates into volumes of 1.14-1.18 lakh units) in FY25. “Similar trends were observed during previous election periods – FY15 and FY20 – as well, with year-on-year volumes contracting in those years,” she added.

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