Archive · 23 Aug 2026
India’s Construction Equipment Sector Cuts FY27 Growth Expectations
India’s construction-equipment companies expected business to grow quickly in FY27.
They are now being more careful because some building projects are moving slowly.
Steel and bitumen, important materials for construction and roads, have become more expensive.
These higher costs make it harder for contractors to complete projects profitably.
Equipment has also become costlier and more difficult to finance.
Some companies are still reporting strong sales and revenue growth.
Other construction companies have reported lower revenue and profits.
Experts say future growth will depend on whether projects start moving from plans and orders to actual construction.
The Indian construction equipment industry has revised its FY27 growth outlook from double-digit expansion to a more moderate single-digit pace.
Equipment sales fell about 2% to 136,995 units in FY26, while domestic sales declined nearly 7% and exports rose 32%.
Higher bitumen and steel prices, alongside slower project execution, are pressuring contractors and equipment demand.
ICRA forecasts construction-equipment growth of 3-5% in FY27, citing delayed project awards, slower road and mining work, stricter emission rules and higher borrowing costs.
Company performance is mixed, with strong growth at Action Construction Equipment, Escorts Kubota and PNC Infratech but declines at KNR Constructions and H.G. Infra Engineering.
- Who
- India’s construction-equipment manufacturers, contractors, infrastructure companies and industry researchers, including ICEMA and ICRA.
- What
- The construction-equipment sector has lowered its FY27 growth expectations from double-digit growth to a more moderate single-digit pace.
- When
- The reassessment concerns FY27, following subdued performance in FY26; the article also cites results from Q1 FY27.
- Where
- India, including national highway, road and mining projects.
- Why
- Higher steel and bitumen prices, slower project execution, delayed project awards, stricter emission rules and higher financing costs are weighing on the recovery.
Growth case
Caution case
Infrastructure spending and project pipelines
Growth case
The Centre’s Rs 12.2 lakh crore capital-expenditure programme, stronger road activity and existing project pipelines could support continued sector growth.
Caution case
Slower road, highway and mining execution and delays in awarding new projects could prevent planned spending from translating into equipment demand.
Company performance
Growth case
Action Construction Equipment reported about 20% Q1 FY27 revenue growth, while Escorts Kubota’s construction-equipment volumes rose 27% and segment revenue increased 39%.
Caution case
KNR Constructions’ Q1 FY27 revenue fell 4% and H.G. Infra Engineering’s declined about 26%; stronger equipment sales have also occurred alongside margin pressure.
Cost pressures
Growth case
Government compensation and revised highway-contract rules may help contractors manage higher steel, bitumen, fuel and logistics costs.
Caution case
Higher input prices, more expensive equipment, contractor liquidity constraints and borrowing costs continue to threaten profitable execution.
- FY27 industry outlook
- Moderate single-digit growth, down from the earlier expectation of double-digit growth.
- ICRA equipment forecast
- Construction-equipment growth of 3-5% in FY27.
- FY26 equipment sales
- Sales declined about 2% to 136,995 units; domestic sales fell nearly 7%.
- FY26 exports
- Construction-equipment exports increased 32%.
- Bitumen price
- Bitumen rose from roughly Rs 40,000-45,000 per tonne to nearly Rs 80,000 before easing to about Rs 75,000 in July.
- Steel price
- Domestic hot-rolled coil prices rose about 14% sequentially to Rs 57,700 per tonne by the end of March.
- Government response
- Highway contract rules were changed to provide compensation based on newer market rates for higher steel, bitumen and other input costs.