Domestic mining, construction equipment industry to clock up to 20% growth in 2018: ICRA

The domestic mining and construction equipment industry is estimated to grow by up to 20 per cent in 2018, supported largely by government-backed projects, rating agency ICRA said Tuesday.

"The Indian mining and construction equipment (MCE) industry is expected to report another year of strong performance in calendar year (CY2018) and is estimated to grow by 17-20 per cent," it said in a statement.

As per ICRA report, available trends show that the demand for excavators and backhoes, which account for over 65 per cent of industry volumes, grew by 35-40 per cent during first half of 2018.

"There was a strong pick-up in national highway (NH) work awards by the Government of India during Q4 FY2018, with an all-time high of 17,055 kms being awarded during FY2018. This follows a relatively muted road project awards until December 2017 (4,163 kms YTD Dec-17)," Pavethra Ponniah, Vice President, Corporate Sector ratings, ICRA said.

These project awards are likely to support MCE demand over the next few quarters," Ponniah said.

"In the run-up to the elections, we expect MCE demand to moderate briefly during Q2 CY2019, however, the decline is expected to be largely limited to the election quarter, with the same picking up again by Q3-Q4 CY2019, contingent on the formation of a stable government at the Centre," Ponniah added.