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Time of India
an hour ago
- Business
- Time of India
Indian mining and construction equipment industry to report 2-5% volume growth in FY26: ICRA
NEW DELHI: Indian mining and construction industry (MCE) industry is expected to display a muted year-on-year volume growth of 2–5% in FY26, corresponding to volumes of 1.43-1.47 lakh units, according to ICRA , a rating agency. Following the decline witnessed in Q1 FY26, the agency anticipates an acceleration of new award activity in H2 FY26, especially by the government. Higher costs engendered by the construction equipment vehicles (CEV)-V norms, are likely to dampen demand and squeeze OEM margins. Ritu Goswami , sector head (Corporate Ratings), ICRA, said, "The tepid new award activity and slowdown in road construction and Jal Jeevan Mission (JJM) projects has also hampered demand for the earthmover segment, which constitutes a bulk of the Indian MCE sector demand. Given the observed weakness in domestic demand during Q1 FY2026—which is expected to persist into Q2 as monsoon conditions impact the construction sector—industry recovery hinges on the improved traction in H2 FY2026.' The Indian MCE industry reported a marginal volume decline (1% year-on-year) in Q1 FY26 as per the initial data released by the Indian Construction Equipment Manufacturers Association (ICEMA). While the domestic volumes contracted by 4% year-on-year, a strong 31% year-on-year growth in exports supported the overall sales during this period. In Q1 FY26, the growth of 31% in exports was led by backhoe loaders, excavators and skid steer loaders, which cumulatively accounted for 76% of the total exported volumes and saw a 34% year-on-year growth. 'From January 1, 2025, regulatory changes viz. CEV stage V emission norm transition and mandatory safety features became effective for wheeled construction equipment in India. It has led to increased prices for compliant machines, which are likely to be passed on to the customer (partly or fully) over the next few quarters. This, coupled with seasonality in sales (generally slow during rainy season) and subdued awarding activity for infrastructure projects, will weigh on the domestic demand sentiments for the MCE industry during H1,' Goswami added. In terms of financial metrices, the aggregate revenue for the Indian MCE industry is expected to have moderated to single digit year-on-year growth in Q1 FY26, given the flat volumes. On the cost front, the higher cost of CEV-V compliance, coupled with increased steel cost (due to safeguard duty imposed by the Government of India on non-alloy and alloy steel flat products in April 2025) is likely to have impacted the year-on-year profit margins during the quarter, as price hikes to offset the impact are generally taken in a staggered manner. Notably, the large players in this segment are all unlisted.
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Business Standard
a day ago
- Business
- Business Standard
ICRA forecasts muted growth for mining and construction industry in FY26
The Indian mining and construction equipment (MCE) industry is set to report muted growth of 2–5 per cent in 2025-26, as domestic demand remains under pressure due to a combination of erratic monsoons, delayed infrastructure project awards, and rising equipment costs following regulatory changes, ICRA said in a statement. 'Early onset of monsoons and unseasonal rains in some regions of the country disrupted construction and mining activities in Q1 FY2026 (April-June),' said Ritu Goswami, Sector Head at ICRA. The impact was visible in Coal India's flat production figures and the sluggish activity in major infrastructure schemes such as the Jal Jeevan Mission (JJM), she added. From 1 January 2025, the sector transitioned to CEV (Construction Equipment Vehicle) Stage-V emission norms and mandatory safety features for wheeled equipment. 'This has led to increased prices for compliant machines, which are likely to be passed on to the customer (partly or fully) over the next few quarters,' Goswami said. These cost escalations, combined with weak project awarding activity and the seasonal sales slowdown during the monsoons, will collectively subdue demand in the first half of the fiscal, she added. Data from the Indian Construction Equipment Manufacturers Association (ICEMA) shows a 1 per cent year-on-year decline in overall industry volumes in Q1 FY2026. Domestic volumes fell by 4 per cent, but a robust 31 per cent growth in exports cushioned the dip, driven by backhoe loaders, excavators, and skid steer loaders, which together made up 76 per cent of export volumes. Despite current headwinds, ICRA remains optimistic about a demand revival in the latter half of the fiscal, supported by a government capital outlay of ₹11.2 trillion for initiatives such as JJM, Pradhan Mantri Gram Sadak Yojana (PMGSY), and Pradhan Mantri Awas Yojana-Gramin. 'Continued emphasis on sectors including transportation, water supply and sanitation, and irrigation is anticipated to result in an increase in new project awards and execution, thereby supporting domestic MCE demand,' said Goswami. Industrial and warehousing construction demand is also expected to remain steady due to a strong domestic market focus. Meanwhile, the export outlook remains positive, even as the industry awaits clarity on a potential 26 per cent reciprocal tariff by the US. 'Opportunities in alternate markets continue to offer significant diversification potential,' ICRA noted. Financially, OEMs saw only single-digit revenue growth in Q1 FY26, with margins under pressure from higher steel and compliance costs. However, the credit profiles of most players are expected to remain stable due to low leverage and healthy liquidity buffers.
India Gazette
a day ago
- Business
- India Gazette
Indian Mining and Construction Equipment Industry expected to revive in H2 FY2026: ICRA
ANI 15 Jul 2025, 13:04 GMT+10 New Delhi [India], July 15 (ANI): Following a subdued start to FY2026, Rating agency ICRA projects a turnaround in the Indian mining and construction equipment (MCE) industry in the latter half of the year, driven primarily by renewed government-led capital expenditure. 'Given the observed weakness in domestic demand during Q1 FY2026--which is expected to persist into Q2 as monsoon conditions impact the construction sector--industry recovery hinges on the improved traction in H2 FY2026,' said Ritu Goswami, Sector Head, Corporate Ratings, report further reveals that the sector witnessed a muted performance in Q1 FY2026, with volumes dipping by 1 per cent year-on-year due to multiple headwinds, including early monsoons, unseasonal rainfall, and sluggish new project awards.'Early onset of monsoons and unseasonal rains in some regions of the country disrupted the construction and mining activities in Q1 FY2026, which is also reflected in the flattish production data reported by Coal India Limited (the India's largest miner) during this period vis-a-vis a year ago,' Ritu Goswami further believes that key government schemes such as the Jal Jeevan Mission (JJM), Pradhan Mantri Gram Sadak Yojana (PMGSY), and PM Awas Yojana-Gramin (PMAY-G) are set to receive increased attention and budgetary allocations under the 11.2 lakh crore capital expenditure plan announced in union budget for FY2025-26. This is likely to result in a revival in project execution and demand for reports also highlighted that, in Q1 FY2026, the growth of 31 per cent in exports was led by backhoe loaders, excavators and skid steer loaders, which cumulatively accounted for 76 per cent of the total exported volumes and saw a 34 per cent YoY earthmoving segment, which forms the bulk of domestic MCE demand, was particularly affected in Q1. Domestic volumes declined 4 per cent YoY, though exports offered some relief with a strong 31 per cent surge, led by backhoe loaders, excavators, and skid steer regulatory changes like CEV-V emission norms and rising input costs are expected to keep OEM margins under pressure, ICRA maintains its forecast of a 2-5 per cent volume growth for FY2026, translating to 1.43-1.47 lakh units. The long-term outlook remains positive, supported by strong export potential and a government-led infrastructure push. (ANI)
Hans India
a day ago
- Business
- Hans India
Indian mining and construction industry sees 2-5 pc growth in Q1: Report
New Delhi: The Indian mining and construction (MCE) industry experienced a year-on-year (YoY) volume growth of 2 to 5 per cent in the first quarter of FY26, according to a report released on Tuesday. The volumes are expected to range between 1.43-1.47 lakh units, which is a marginal decline of 1 per cent YoY in Q1 FY2026 as per the initial data released by the Indian Construction Equipment Manufacturers Association (ICEMA), an ICRA report said. While the domestic volumes contracted by 4 per cent YoY, a strong 31 per cent YoY growth in exports supported the overall sales during this period, the report noted. ICRA anticipates an acceleration of new award activity in the second quarter of FY2026, especially by the government. Going forward, industries will witness continued industrial and warehousing construction demand, which will support the growth in MCE volumes, the report said. Similarly, higher costs engendered by the construction equipment vehicles (CEV)-V norms are likely to dampen demand and squeeze OEM margins. 'Early onset of monsoons and unseasonal rains in some regions of the country disrupted the construction and mining activities in Q1 FY2026, which is also reflected in the flattish production data reported by Coal India Limited during this period," said Ritu Goswami, Sector Head, Corporate Ratings, ICRA. The tepid new award activity and slowdown in road construction and Jal Jeevan Mission (JJM) projects have also hampered demand for the earthmover segment, which constitutes a bulk of the Indian MCE sector demand, Goswami added. In Q1 FY2026, the growth of 31 per cent in exports was led by backhoe loaders, excavators and skid steer loaders, which cumulatively accounted for 76 per cent of the total exported volumes and saw a 34 per cent YoY growth, the report added. The United States is one of the top two MCE markets globally and ranks among the top five export destinations for India-manufactured MCEs and related components. The government has allocated Rs. 11.2 lakh crore for capital expenditure in FY2025-26, with major initiatives such as the JJM, PM Gram Sadak Yojna (PMGSY), and PM Awas Yojna-Gramin (PMAYG) receiving renewed focus, which will accelerate activities in upcoming quarters, the report said.
Time of India
a day ago
- Business
- Time of India
MCE sector growth seen at 2–5% in FY26, Q1 domestic volumes down 4%: Report
New Delhi: The Indian mining and construction equipment (MCE) industry is expected to post a subdued year-on-year volume growth of 2–5 per cent in FY2026, translating to total sales of 1.43–1.47 lakh units, rating agency ICRA said on Tuesday. In the first quarter of FY2026, industry volumes declined marginally by 1 per cent, as per initial data from the Indian Construction Equipment Manufacturers Association (ICEMA). Domestic sales fell 4 per cent year-on-year during the quarter, while exports surged by 31 per cent, driven by strong demand for backhoe loaders, excavators and skid steer loaders. Monsoon onset, weak project pipeline affect early FY26 performance 'Early onset of monsoons and unseasonal rains in some regions of the country disrupted the construction and mining activities in Q1 FY2026, which is also reflected in the flattish production data reported by Coal India Limited during this period vis-à-vis a year ago,' said Ritu Goswami, Sector Head, Corporate Ratings, ICRA. According to Goswami, muted new project awards and a slowdown in road and Jal Jeevan Mission (JJM) construction have weighed on earthmoving equipment demand, a key segment of the MCE industry. 'Given the observed weakness in domestic demand during Q1 FY2026—which is expected to persist into Q2 as monsoon conditions impact the construction sector—industry recovery hinges on the improved traction in H2 FY2026,' she said. Government capex, public schemes to drive recovery in H2 The Government of India has allocated ₹11.2 lakh crore for capital expenditure in FY2025-26. Flagship infrastructure schemes such as the JJM, PM Gram Sadak Yojana (PMGSY), and PM Awas Yojana-Gramin (PMAY-G) are expected to support new project awards. 'Continued emphasis on sectors including transportation, water supply and sanitation, and irrigation is anticipated to result in an increase in new project awards and execution, thereby supporting domestic MCE demand. While certain private sector capital expenditure decisions may be deferred due to global headwinds, most industries are expected to experience continued industrial and warehousing construction demand because of domestic market focus,' Goswami said. ICRA has retained its volume growth forecast for FY2026 at 2–5 per cent, corresponding to 1.43–1.47 lakh units. New norms, rising steel prices exert cost pressure on OEMs From January 1, 2025, the transition to Construction Equipment Vehicle (CEV) Stage V emission norms and mandatory safety feature compliance for wheeled equipment has increased machine prices. ICRA expects these costs to be passed on to customers partly or fully over the next few quarters. 'This, coupled with seasonality in sales (generally slow during rainy season) and subdued awarding activity for infrastructure projects, will weigh on the domestic demand sentiments for the MCE industry during H1,' Goswami added. On the cost front, compliance-related cost hikes and the Government of India's safeguard duty on flat steel products (announced in April 2025) are expected to impact margins, with most OEMs expected to take staggered price hikes. Revenue growth for the sector is projected to have moderated to single digits in Q1 FY2026, due to flattish volumes. However, the credit profiles of OEMs are expected to remain stable, supported by low leverage and comfortable liquidity. Exports grow 31% in Q1; US tariff concerns not expected to hurt Exports in Q1 FY2026 were led by backhoe loaders, excavators, and skid steer loaders, which together accounted for 76 per cent of total export volumes and grew by 34 per cent year-on-year. The United States is among the top five export destinations for Indian MCEs and related components. Although uncertainty surrounds a proposed 26 per cent reciprocal tariff by the US on Indian MCE exports, ICRA said the impact is not likely to be material as OEMs continue to tap alternate markets with strong diversification potential.>
