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CONSTRUCTION EQUIPMENT

expected to continue in the upcoming fiscal with road construction According to Maximize Market Research, the Indian Construction
gaining pace in recent months and a pick-up in demand from Equipment Market was valued at US$6.66 billion in 2021 and is
the mining sector. estimated to reach a value of US$12.4 billion in 2029, growing at
The Indian construction equipment industry clocked strong YoY a CAGR of 8.9% over the forecast period. With a solid push from
sales growth of 23% in the third quarter of the current fiscal over the government’s ambitious infrastructure development plans
Q3 FY22. This uptrend in Q3 results of FY23 comes on the back like National Bank for Financing Infrastructure and Development,
of improved performance across all equipment segments, i.e., National Monetization Pipeline, and Gatishakti, India will rise to be
earthmoving, material handling, material processing, and road a key player, the second largest in the CE
construction equipment. sector by 2030.
The positive industry performance in Q3 of FY23 has primarily “The push is bound to result in good traction
been powered by the robust 22% YoY sales growth of earthmoving for the equipment and going forward, the
equipment (EME), which accounts for nearly three-fourths of total market will improve. We have already seen
CE sales. Though backhoe loader sales which account for about good improvement in the last few years
half of the earthmoving equipment sales have been declining in and in coming years expect average 10-
recent months of November and December, excavator sales with 15% revenue growth,” said Sandeep Singh,
more than 30% share in total EME sales, have been on the rise MD, Tata Hitachi Construction Machinery Company, during the
during this period, leading to the upward trend observed in the company’s 5-Tonne Wheel Loader ZW225 launch event.
overall sales of earthmoving equipment. The material handling Speaking at a product launch event, Deepak Shetty JCB India
equipment mainly comprising pick & carry cranes, observed a YoY CEO and Managing Director, said, “India is going to be a growth
sales growth of 56% during the 3rd quarter, while road construction driver for the world in the coming decades, and much of this
equipment sales grew by 12%. growth will come from Infrastructure development in the country.
A similar trend has been witnessed in the quarter-on-quarter (QoQ) There are projects of significant national
growth as well. Sales in Q3 FY23 were up by 21% as compared to importance that are gaining encouraging
Q2 sales in the current fiscal year. While earthmoving equipment momentum across the country. Large-scale
with its lion’s share of CE sales grew 19% over the last quarter, infrastructure development will require
material handling equipment and concrete equipment recorded larger and more productive machines,
QoQ sales growth of 25% and 18% respectively in the third quarter and this new range of excavators addresses
of FY23. Material processing equipment registered a 5% quarterly that need. Projects such as Bharatmala,
growth while road construction equipment, which had showed Sagarmala, new ports and logistic hubs will future create greater
worrying downward trends over the last two quarters, staged a opportunities.”
recovery with a whopping 75% QoQ growth in Q3 of the current Reacting on the recent Union Budget announcement, Deepak
fiscal year, albeit on a low base. Shetty, Chief Executive Officer & Managing Director, JCB India,
“The third quarter growth in CE sales has been primarily driven by stated, “Union Budget 2023-24 continues to give a strong push to
the accelerated pace of metro and high-speed rail construction,” infrastructure development by increasing the capital investment
said Dimitrov Krishnan, president, ICEMA, and MD, Volvo CE India. outlay by 33% to `10 lakh crore, almost three times the outlay in
“The pace of road construction, the largest end-user segment 2019-20. This will create demand for construction equipment and
contributing nearly 40% of the total CE demand in the country, create jobs, apart from removing the infrastructure bottlenecks.
has also picked up in the last month of the 3rd quarter along with This budget lays foundation for India’s development path to
increased mining activity, which helped the industry record an become a $5 trillion economy. Continuing provision of 50-year
encouraging growth in the third quarter,” he added. interest free loan to state governments for one more year will spur
Additional drivers of construction equipment sales in Q3 of FY23 investment in infrastructure.”
included post-monsoon resumption of business and settling down Addressing the gathering during the inaugural ceremony of the
of the ongoing inflationary trends in global commodity prices. recently concluded bauma CONEXPO INDIA 2023, Nitin Gadkari,
However, factors such as continuation of the Russia-Ukraine war Union Minister of Road Transport & Highways, called upon the
and unpredictable, re-emerging cycles of covid, continue to different stakeholders of the construction industry to unlock
cause worry for the industry’s growth trajectory. business opportunities and accorded highest priority to the
VG Sakthikumar, Convener, ICEMA Industry Analysis and Insights infrastructure industry. Stressing on Make in India and Atmanirbhar
Panel and Managing Director, Schwing Stetter India, said, “In the Bharat, Gadkari emphasised on the need of reducing import
results of the third quarter of FY23, we can see very encouraging of components. He also called upon the construction industry
signs of the industry emerging from the headwinds of the past stakeholders to form Joint Ventures (JVs) with international
two years and gathering momentum for companies for technologies and innovations.
future growth. Both domestic and export While making pitch for clean fuel, he urged equipment
markets have performed better than the manufacturers to focus more on alternative fuel such as green
previous quarter and the mood of the hydrogen, biofuel, bio-bitumen. He emphasised on precast
industry is optimistic in view of the expected technology to reduce cost of construction and asked the
further increase in the pace of execution of stakeholders to upgrade technology as huge potential is lying
infrastructure projects in the next quarter.” ahead in the road construction sector.

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