The domestic mining and construction equipment industry may face pressure in the current financial year. Rating agency ICRA gave information on Thursday. According to the rating agency, a slowdown in new projects amid the Lok Sabha elections and the impact of monsoon on construction activities may lead to a slowdown in the domestic mining and construction equipment (MCE) industry in the current financial year 2024-25.
How much can the decline be?
Rating agency ICRA said on Thursday that ICRA expects a decline of 12-15 percent (i.e. 1.14-1.18 lakh units) on an annual basis in the financial year 2024-25. Strong growth of 26 percent in FY 2022-23 and 24 percent in FY 2023-24 was recorded for two consecutive years.
Reduction in projects will be the reason
ICRA Area Head (Corporate Ratings) Ritu Goswami said the disruption in project activity in two consecutive quarters amid the Lok Sabha elections and monsoon-related impact on construction activity in the second quarter is likely to lead to a decline in sales in the first half of FY 2024-25. There is doubt.
According to the statement, “The model code of conduct will remain in force in the parliamentary elections in April-May 2024 (till the declaration of results on June 4, 2024), due to which new rules will be implemented in the fourth quarter of the financial year 2023-24 and the first quarter of the financial year 2024-25.” There will be a slowdown in projects.” It said, ”Apart from this, the total revenue of the companies surveyed by ICRA is expected to decline by nine to 12 percent and ‘operating margin’ by 100-150 basis points in the financial year 2024-25. Have an estimate.’
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