MCE industry logs 5% growth during Q1
Growth came while the industry was bracing for a contraction in domestic demand in the first half of this year: Report
MCE volumes Expected to Ramp up:
♦ Reflects customer optimism over govt’s sustained focus on infra development
♦ MCE volumes expected to ramp up faster than previously anticipated in H2 FY2025
New Delhi: Bucking the trend, the Indian Mining and Construction Equipment (MCE) industry reported a 5 per cent growth year-on-year (YoY) in volumes in the April-June quarter, a report showed on Tuesday.
As per the initial data released by the Indian Construction Equipment Manufacturers Association (ICEMA), the growth came while the industry was bracing for a contraction in domestic demand in the first half of this year, according to credit ratings ICRA.
The report mentioned that this expectation was in line with the previous election cycles, driven by a slowdown in the new project award activity (due to the Model Code of Conduct in place on account of the Parliamentary Elections in April-June) and the monsoon-related impact on construction activities in Q2 FY2025.
Nonetheless, the performance in Q1 reflects customer optimism over the government’s sustained focus on infrastructure development and the consequent impact on MCE demand.
“With renewed confidence regarding policy stability towards infrastructure-fuelled economic development, the new project award activities (and MCE volumes) are expected to ramp up faster than previously anticipated in H2 FY2025,” said Ritu Goswami, Sector Head - Corporate Ratings, ICRA.
In Q1, the growth in domestic sales was driven by the earthmoving and concreting equipment segments, which saw 5 per cent and 8 per cent YoY growth, respectively.