India’s domestic construction equipment industry is expected to post modest volume growth of 2–4 per cent in both FY26 and FY27, despite subdued demand caused by slowing real estate activity and a deceleration in road construction, according to Crisil Ratings.

Revenue for manufacturers is projected to rise by 6–8 per cent over the same period, aided by selective price increases that are helping offset higher compliance costs. Strong export realisations and stable steel prices are also expected to cushion pricing pressures from low-cost imports, limiting the contraction in operating margins to around 11 per cent, compared with 12 per cent last fiscal year.

Crisil’s assessment, based on an analysis of 17 manufacturers representing nearly three-fourths of the industry’s volume, indicates that prudent capital expenditure will keep leverage under control and maintain stable credit profiles.

Demand for construction equipment is primarily led by the roads, mining and real estate sectors, along with railways, water supply and power. Earthmoving machinery continues to dominate the product mix, accounting for 70 per cent of total volumes. Material handling equipment makes up 12 per cent, concrete equipment 10 per cent, road equipment 5 per cent and material processing machinery 2 per cent.

In FY25, domestic sales contributed 90 per cent of overall industry volumes, with exports comprising the remaining share.