ICRA has raised its FY27 mining and construction equipment growth outlook to 8–10%, with excavators and exports strengthening even as cost pressure persists.
ICRA has raised its FY27 mining and construction equipment growth outlook to 8–10%, with excavators and exports strengthening even as cost pressure persists.
New Delhi, September 29, 2026: India’s mining and construction equipment (MCE) industry is recovering faster than ICRA expected earlier this year, but the improvement is uneven across machine categories and the rating agency continues to flag cost pressure as a key industry risk.
ICRA’s 28 September 2026 quarterly update forecasts 8–10% year-on-year growth in MCE industry volumes in FY27, following a marginal decline in FY26. Its March 2026 outlook had expected only 3–5% growth for FY27, making the latest assessment a material upward revision rather than a routine update.
The recovery is already visible in the first five months of FY27. ICRA’s public summary says industry volumes increased 14% year-on-year in 5M FY27, while exports rose 34%. The agency says stronger infrastructure execution, higher state-level infrastructure spending, sustained public capital expenditure and healthy export demand are supporting the recovery.
ICRA’s March assessment described FY27 as a year of modest recovery after a subdued FY26, forecasting 3–5% growth. The September update is considerably stronger, with the agency now expecting 8–10% growth in overall MCE volumes.
The latest public ICRA summary points to the Government’s ₹12.2 lakh crore capital-expenditure outlay for FY27, improving infrastructure project execution and rising state-level infrastructure investment as part of the demand backdrop.
Equipment Brief analysis: the revision matters because it suggests project execution is converting into machine demand more quickly than appeared likely six months ago. Equipment Brief has separately examined how major infrastructure programmes influence machinery demand in its analysis of India’s mega-project equipment requirements.
Detailed reporting on ICRA’s September assessment shows that the improvement is particularly visible in earthmoving equipment. Backhoe-loader volumes rose 11% year-on-year in the first five months of FY27, while crawler excavator volumes increased 17% over the period cited in the assessment.
That mix is relevant because the two categories serve different but overlapping demand pools. Backhoe loaders remain widely used across roads, utilities, smaller infrastructure works and general construction, while crawler excavators have significant exposure to mining, major earthworks and larger infrastructure packages.
Equipment Brief analysis: simultaneous growth in both backhoe loaders and crawler excavators points to a recovery that is broader than a single-product rebound.
Material-handling equipment has also moved sharply back into growth. Reported figures from ICRA’s assessment show volumes increasing about 40% year-on-year in the first five months of FY27, supported particularly by pick-and-carry cranes.
Road-construction equipment moved in the opposite direction. The segment was down about 4% year-on-year in the period cited for FY27. ICRA linked the weakness to subdued project awarding by the National Highways Authority of India and the Ministry of Road Transport and Highways.
This divergence matters because a stronger overall equipment market does not mean every machinery category is experiencing the same cycle. Road machinery is more directly exposed to highway contracting and execution, while excavators and material-handling equipment have broader applications across mining, urban infrastructure and industrial construction.
Equipment Brief has also tracked the road-equipment industry’s localisation and component concerns in its report on PLI support for critical road-equipment components.
Exports remain an important supporting factor rather than the main story. ICRA’s public summary confirms that export volumes grew about 30% in FY26 and a further 34% year-on-year in 5M FY27, supported by improved emission compliance, cost competitiveness and OEM-led diversification across developed and emerging markets.
Equipment Brief has examined that trend separately in its analysis of India’s construction-equipment export push beyond South Asia.
The stricter CEV Stage V emission framework also forms part of that export context because higher emission compliance can improve the ability of India-built equipment to address more demanding overseas markets.
The latest ICRA projection should not be treated as directly equivalent to the Indian Construction Equipment Manufacturers’ Association’s separate FY27 outlook.
Earlier in September, ICEMA President Deepak Shetty said the association expected domestic construction-equipment sales to grow 9–12% in FY27, up from an earlier expectation of around 7%.
ICRA’s 8–10% forecast refers to overall mining and construction equipment industry volumes, while ICEMA’s forecast refers specifically to domestic construction-equipment sales. The forecasts therefore measure different bases rather than competing estimates of exactly the same metric.
ICRA’s September update explicitly flags continuing cost pressure even as volumes recover. Secondary reporting on the assessment points to higher steel prices, logistics costs, imported-component expenses and rupee depreciation as pressures on manufacturer profitability.
Equipment Brief is not using the detailed operating-margin range reported by secondary sources until that figure is confirmed in the primary ICRA release or presentation.
Equipment Brief analysis: the FY27 story is therefore not simply one of rising machine sales. Stronger volumes can improve revenue and capacity utilisation, but manufacturers still have to manage input inflation, imported-component exposure and pricing discipline.
For manufacturers, the outlook increases the importance of localisation, procurement efficiency, product mix and supply-chain control. For dealers and rental companies, stronger backhoe-loader, excavator and material-handling volumes point to improving business conditions, although road-equipment weakness shows why demand cannot be treated as uniform across the market.
For contractors and fleet buyers, stronger industry volumes can improve machine availability and competitive choice, while persistent cost pressure at OEMs could still influence equipment pricing.
The next test is whether infrastructure execution, mining demand and exports remain strong enough through the rest of FY27 to sustain the recovery — and whether road-project awarding improves sufficiently to bring specialised road equipment into the wider rebound.
Sources: ICRA, 28 September 2026 quarterly update; ICRA’s March 2026 construction-equipment outlook; Business Standard reporting on the September ICRA assessment and ICEMA’s FY27 domestic-sales outlook.
