India mining, construction equipment volumes seen rising up to 10 pc in FY27: Report

New Delhi: India's mining and construction equipment (MCE) industry is set for a broad-based recovery with industry volumes expected to rise 8-10 per cent year-on-year to around 150,000 units in 2026-27, according to a report released on Monday.

A report by ICRA noted that the recovery in volumes will follow the 2 per cent decline in 2025-26 due to strong domestic demand and a rapid rise in exports.

Domestic MCE volumes rose 14 per cent year-on-year in the first five months of the current fiscal, while exports increased 34 per cent, it added.

Government capital expenditure rose nearly 30 per cent in the first four months of the fiscal, while MCE retail registrations turned positive in July which indicates a recovery in demand, said Suprio Banerjee, Vice President & Co-Group Head, Corporate Ratings, ICRA.

The recovery is expected to be supported by the government's Rs 12.2 lakh crore capital expenditure programme, increased allocations for the Jal Jeevan Mission and Pradhan Mantri Gram Sadak Yojana, higher infrastructure funding for states and the proposed CIE scheme to deepen domestic manufacturing and localisation, according to the report.

The report has expected that revenue of its sample of 14 large MCE companies to grow 11-13 per cent in 2026-27 after remaining broadly flat in the previous fiscal.

However, operating margins are expected to decline by 100-150 basis points to around 6-8 per cent from 8.4 per cent in 2025-26 due to higher steel, logistics and imported component costs, compounded by rupee depreciation.

Despite margin pressure, ICRA expects the credit profiles of equipment manufacturers to remain stable, supported by strong cash accruals, limited external debt and healthy coverage indicators.

Additionally, the report maintained a stable outlook on the Indian MCE industry.

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