More Stories

Informist, Monday, Sept. 28, 2026

 

NEW DELHI – The margins of domestic mining and construction equipment companies are expected to moderate to 6.8% in the financial year 2026-27 (Apr-Mar) from 8.4% in FY26, rating agency ICRA Ltd. said in a press release Monday. The margins are likely to moderate because of higher steel prices, increased logistics costs, and rising cost of imported components amid depreciation of the rupee, the rating agency said, adding that stiff competition and limited pricing flexibility could constrain companies from passing on the cost inflation.

 

The revenue of ICRA's sample set of 14 mining and construction companies is projected to rise 11-13% year-on-year in FY27, after the flat performance in FY26, owing to volume recovery, continued export momentum, modest price hikes, and a favourable product mix, as per the rating agency. ICRA expects the volumes of these companies to rise by 8-10% year-on-year to 150,000 units against the 2?cline witnessed in FY26.

 

In the first five months of FY27, domestic volumes rose 14% year-on-year and exports grew 34?ter two years of muted performance by mining and construction equipment companies, the rating agency said. The growth is being driven by domestic demand, with local sales contributing to over 80% of volumes and roughly 85-90% of equipment purchased on finance, as per ICRA. 

 

"Exports have emerged as a key growth driver, surging by 30% YoY (year-on-year) in 2025-26 and a further 34% YoY (year-on-year) in the first five months of the current fiscal, boosted by improved emission compliance, cost competitiveness, and OEM (original equipment manufacturers)-led diversification. The exports volumes nearly doubled to (about) 17% during the above-mentioned period from (about) 9% in 2024-25," Vice-President and Co-Group Head (Corporate Ratings) Suprio Banerjee said. He added that earthmoving equipment dominates with around 75% share, led by backhoe loaders, crawler excavators, and skid steer loaders.

 

In Apr-Aug, volumes of backhoe loaders rebounded by 11% on year driven by improved project execution and higher infrastructure spending. Similarly, volumes of excavators grew 17% year-on-year in FY27, aided by sustained mining activity and the increasing adoption of specialised equipment, including mini excavators. Material handling equipment grew sharply by 40% year-on-year, against the 10?cline in FY26, backed by strong demand for pick-and-carry cranes. However, road equipment volumes have declined 4% on year in FY27 so far amid subdued project awarding by the National Highways Authority of India and Ministry of Road Transport and Highways, impacting recovery in the sector, the rating agency said. In FY26, the volumes of road equipment declined by 4% on year. 

 

"The US remains the largest destination, accounting for (about) 15% of exports, followed by Africa (7%), Saudi Arabia (5%) and the UAE (United Arab Emirates) (4%). Shipments to the US have started recovering after tariff moderation, while FTAs (free trade agreements) with the UK, EU (European Union), Australia, New Zealand and the UAE should open additional opportunities," Banerjee said. "That said, higher steel prices, elevated freight costs, and supply chain disruption due to global conflicts remain key risks." 

 

Notably, despite the margin pressure, the rating agency expects the credit profile of the OEMs to remain stable in FY27 with strong cash accruals, limited external debt, and healthy coverage indicators.  End

 

Reported by Astha Oriel

Edited by Rajeev Pai

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.