The first quarter sales of Construction Equipment in FY 2024-25 grew 5% on a year-on-year basis, from 27,577 units in Q1 FY2023-24 to 28,902 units in Q1 FY 2024-25. The growth was a result of increasing sales in three of the five main equipment segments of the CE industry in the period April – June 2024 as compared to April – June 2023. These were Earthmoving Equipment with a 5% increase, Road Construction Equipment with a 9% increase, and Concrete Equipment with a growth of 11%. Material Handling Equipment and Material Processing Equipment, on the other hand, clocked 3% and 4% reduction in sales in Q1 FY25 as compared to Q1 FY24.
On a quarter-on-quarter basis, however, the total sales figures for Q1 FY25 were 29% lower than 40,965 units sold in Q4 FY24. Except for a 1% increase in sales of Material Processing Equipment, all the other equipment segments sold lesser units than in the previous quarter. Earthmoving Equipment, which accounts for around 70% of total CE sales, registered 31% Q-o-Q de-growth, while the percentage drop Q-o-Q for the other segments stood at 29% for Material Handling Equipment, 32% for Road Construction Equipment and 19% for Concrete Equipment.
“The first quarter of the financial year is traditionally a slower one due to normal seasonality that the industry experiences every year,” said Mr. V. Vivekanand, President, ICEMA and Managing Director, Caterpillar India Pvt. Ltd. “Further, this year, there was the added effect of the General Elections in the country, which normally dampens the pace of projects in the first quarter due to the Election Code of Conduct in force, we expect with the thrust on infrastructure spending is intact and industry is hopeful to resume the momentum in demand after monsoon,” he added.
Of the total 28,902 units of Construction Equipment sold in Q1 FY25, 26,020 units were sold in the domestic market while 2,882 units were exported. The Earthmoving Equipment segment sold 19,858 units while the sales of Material Handling Equipment stood at 3,760 units, Concrete Equipment at 3,199 units, Road Construction Equipment at 1,457 units and Material Processing Equipment at 628 units for the first quarter of FY 2024-25. “Since the Indian CE industry has been on a record-breaking growth trajectory over the past two years, the slowdown in demand for construction equipment experienced during Q1 of FY 2024-25 is less than what is usually experienced in any election year,” said Mr. Jaideep Shekhar, Convener, ICEMA Industry Analysis and Insights Panel, and VP & Managing Director, APAC & EMEAR, Terex India Private Limited. “In fact, sales in the first quarter of the present year are 5% higher than those in the first quarter of last year, despite the General Election effect,” he said.
On a month-on-month basis, sales in June 2024, at 9,363 units, recorded a 2% de-growth as compared to May 2024, while there was a 5% increase over the 8,889 units of sales recorded in June 2023. While two of the five key equipment segments – Earthmoving Equipment and Concrete Equipment – registered 9% and 13% respective growth in monthly sales for June 2024, the rest of the segments, namely, Material Handling Equipment, Road Construction Equipment and Material Processing Equipment, clocked reduced sales to the extent of 7%, 15% and 5% respectively vis-à-vis June 2023.
“Overall, the industry is optimistic about the current year’s growth, as the CE industry in India has embarked upon a phase of accelerated growth spurred by the adoption of new technologies in response to emerging demand, increased localisation of components, and policies to attract increased foreign investments,” said Mr. V. Vivekanand.