Report

ndia’s GDP has started showing signs of recovery, the government recently announced that India’s Gross Domestic Product has grown from 7.2% in the December 2015 quarter to 7.9% in the March 2016 quarter. Public spending in Infrastructure sector has started showing results and the GDP numbers indicates that the economy is beginning to turn for good. Softer crude oil prices has helped the government to save precious dollars and the same been utilized in creating infrastructure across roads, highways, ports etc.

Due prolonged period of slump in the construction sector, demand for construction equipment has witnessed complete collapse between 2011 till 2015. While the recovery to peak demand is still few notches away, but InfraInsights sees that a faster recovery than anticipated could surprise on an all. Recent number of L&T, the construction conglomerate, seems to be suggesting that the intent announced by Government is getting fructified and the outlook seems quite robust. Some of the marquee investment plans as announced by the Government of India and that promises upswing in demand for construction equipment are as below

• Total budgetary provision made for FY17= Rs. 97,000 crore; Target to build 41 km of highways a day
• Indian Railways Vision 2020 proposes to add 25,000 kms of New Lines by 2020 at an estimated cost of investment of roughly Rs.14,00,000 crore ; Total budgetary provision made for FY17= Rs.121000.00 Crores
• India plans to increase its capacity of ports to 1.6 billion tons over the next five years; Budgetary allocation for FY17 = Rs. 4183.14 cr. for development of Indian Shipping, Ports, Inland Waterway Sector and Sagarmala Project.
• Need to build 50 new airports at an investment of $40 bn in the next 10-15 years
• Long-term Irrigation Fund will be created in NABARD with an initial corpus of about Rs. 20,000 crore

InfraInsights is of the view that, even if 50-60% of the proposed investment fructifies, it will lead to doubling of demand for construction equipment. In order to ascertain this view, InfraInsights has initiated research on the construction equipment sector and the report is aimed to provide data, information, analysis and insights, driven from detailed primary research. Report will provide, detailed portfolio analysis of different equipment supplied by different OEMs, current demand and projected demand, usage thumb rules across different industry, demand for equipment under lease model etc..