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Indian mining, construction equipment biz to grow by 5% in FY26: ICRA

Indian mining and construction industry (MCE) industry to display a muted year-on-year (y-o-y) volume growth of 2–5 percent corresponding to volumes of 1.43-1.47 lakh units during 2025-26 (FY26), according to report by ICRA.

Following the decline witnessed during April-June quarter (Q1) of FY26, ICRA anticipates an acceleration of new award activity during the second half of FY26, especially by the Government. Further, several industries are set to witness continued industrial and warehousing construction demand because of domestic market focus, thereby supporting volumes. Simultaneously, higher costs engendered by the construction equipment vehicles (CEV)-V norms1, are likely to dampen demand and squeeze OEM margins.

“Early onset of monsoons and unseasonal rains in some regions of the country disrupted the construction and mining activities in Q1 FY26, which is also reflected in the flattish production data reported by Coal India Limited (the India’s largest miner) during this period vis-à-vis a year ago. The tepid new award activity and slowdown in road construction and Jal Jeevan Mission (JJM) projects has also hampered demand for the earthmover segment, which constitutes a bulk of the Indian MCE sector demand. Given the observed weakness in domestic demand during Q1 FY26—which is expected to persist into Q2 as monsoon conditions impact the construction sector—industry recovery hinges on the improved traction in H2 FY26,” said Ritu Goswami, Sector Head, Corporate Ratings, ICRA.

The Indian MCE industry reported a marginal volume decline (1 percent y-o-y) in Q1 FY26 as per the initial data released by the Indian Construction Equipment Manufacturers Association (ICEMA). While the domestic volumes contracted by 4 percent y-o-y, a strong 31 percent y-o-y growth in exports supported the overall sales during this period.