Construction Equipment Industry anticipates 14-15% revenue surge
Equipment

Construction Equipment Industry anticipates 14-15% revenue surge

According to a report by CRISIL, the domestic construction equipment industry is poised for substantial growth this fiscal year, with an anticipated revenue surge of 14-15%. This follows a robust 29% increase in the previous fiscal period. The driving force behind this expansion is the government's unwavering commitment to infrastructure development, focusing particularly on highways, metros, trains, and projects outlined in the National Infrastructure Pipeline (NIP). Construction activities in the real estate and mining sectors will also contribute significantly to this growth.

Poonam Upadhyay, Director of CRISIL Ratings, emphasised the positive impact of accelerated road construction, accounting for 40% of the demand for construction equipment, on the industry's growth trajectory. Manufacturers are experiencing strong demand not only from the real estate and mining sectors but also from bridge, airport, and metro corridor contractors. Additionally, a surge in equipment purchases is expected in the last quarter of this fiscal year due to the impending transition to CEV Stage-V2 emission norms from April 1, 2024, leading to increased equipment prices.

The industry is set to achieve record-breaking sales volume of 1.2 lakh units in this fiscal year, up from 1.1 lakh units in the previous year. Earthmoving equipment dominated the sales, constituting 70% of the volume, followed by concrete and material handling equipment at 22%, and material processing equipment accounting for the remaining 20%, as per the report.

Manufacturers of construction equipment are anticipated to witness a rise in operating margins by 100-150 basis points, reaching 10.5-11% this fiscal year. This growth is attributed to improved operating leverage and a stabilised price trend for raw materials, particularly steel. The analysis, covering 17 construction equipment manufacturers responsible for 75% of the industry's revenue, substantiates these findings.

Moreover, the increase in working capital borrowings is expected to be offset partially by enhanced cash accruals and moderate capital spending, resulting in "Stable" credit profiles for businesses in the industry.

According to a report by CRISIL, the domestic construction equipment industry is poised for substantial growth this fiscal year, with an anticipated revenue surge of 14-15%. This follows a robust 29% increase in the previous fiscal period. The driving force behind this expansion is the government's unwavering commitment to infrastructure development, focusing particularly on highways, metros, trains, and projects outlined in the National Infrastructure Pipeline (NIP). Construction activities in the real estate and mining sectors will also contribute significantly to this growth. Poonam Upadhyay, Director of CRISIL Ratings, emphasised the positive impact of accelerated road construction, accounting for 40% of the demand for construction equipment, on the industry's growth trajectory. Manufacturers are experiencing strong demand not only from the real estate and mining sectors but also from bridge, airport, and metro corridor contractors. Additionally, a surge in equipment purchases is expected in the last quarter of this fiscal year due to the impending transition to CEV Stage-V2 emission norms from April 1, 2024, leading to increased equipment prices. The industry is set to achieve record-breaking sales volume of 1.2 lakh units in this fiscal year, up from 1.1 lakh units in the previous year. Earthmoving equipment dominated the sales, constituting 70% of the volume, followed by concrete and material handling equipment at 22%, and material processing equipment accounting for the remaining 20%, as per the report. Manufacturers of construction equipment are anticipated to witness a rise in operating margins by 100-150 basis points, reaching 10.5-11% this fiscal year. This growth is attributed to improved operating leverage and a stabilised price trend for raw materials, particularly steel. The analysis, covering 17 construction equipment manufacturers responsible for 75% of the industry's revenue, substantiates these findings. Moreover, the increase in working capital borrowings is expected to be offset partially by enhanced cash accruals and moderate capital spending, resulting in Stable credit profiles for businesses in the industry.

Next Story
Equipment

Handling concrete better

Efficiently handling the transportation and placement of concrete is essential to help maintain the quality of construction, meet project timelines by minimising downtimes, and reduce costs – by 5 to 15 per cent, according to Sandeep Jain, Director, Arkade Developers. CW explores what the efficient handling of concrete entails.Select wellFirst, a word on choosing the right equipment, such as a mixer with a capacity aligned to the volume required onsite, from Vaibhav Kulkarni, Concrete Expert. “An overly large mixer will increase the idle time (and cost), while one that ..

Next Story
Real Estate

Elevated floors!

Raised access flooring, also called false flooring, is a less common interiors feature than false ceilings, but it has as many uses – if not more.A raised floor is a modular panel installed above the structural floor. The space beneath the raised flooring is typically used to accommodate utilities such as electrical cables, plumbing and HVAC systems. And so, raised flooring is usually associated with buildings with heavy cabling and precise air distribution needs, such as data centres.That said, CW interacted with designers and architects and discovered that false flooring can come in handy ..

Next Story
Infrastructure Urban

The Variation Challenge

A variation or change in scope clause is defined in construction contracts to take care of situations arising from change in the defined scope of work. Such changes may arise due to factors such as additions or deletions in the scope of work, modifications in the type, grade or specifications of materials, alterations in specifications or drawings, and acts or omissions of other contractors. Further, ineffective planning, inadequate investigations or surveys and requests from the employer or those within the project’s area of influence can contribute to changes in the scope of work. Ext..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?