Escorts Kubota expects the construction equipment market it serves to expand 12-15% in FY27. Growth will be uneven across the range, with cranes and mini excavators leading while backhoe loaders add 5-7% and compactors 5-6%.
The company enters that year from a strong quarter. Volumes rose 27.4% to 1,344 machines in Q1 FY27 and segment revenue rose 39.2% to Rs 419.6 crore. July was stronger again, with volumes up 49.2% to 534 machines. The market it addresses, covering pick-and-carry cranes, backhoe loaders, mini excavators and compactors, grew around 23 percent during the quarter, led by cranes at 46%.
Sanjeev Bajaj, chief officer of the construction equipment business division, discounted much of that on the Q1 FY27 earnings call. The year-ago quarter was disrupted by the BS-V changeover, when manufacturers were pushing costlier machines into a market wary of the new technology. Stripped of that base, he put sustainable crane growth closer to 20 percent.
Demand drivers
What is left, he argued, is a genuine recovery in project execution. "The last financial year, the rate at which roads were constructed was almost half of what it was in the year 2024 and 2025," Bajaj said. "So there is a renewed focus by the government to push these infrastructure projects."
He pointed to development activity in Andhra Pradesh following the new capital city, a pickup in West Bengal, and traction in solar power and metro rail. Corporate buyers are taking higher-capacity cranes where execution speed matters to project timelines.
Escorts Kubota gained about 2.7 percentage points of segment market share last year and intends to stay aggressive, Bajaj said. Backhoe loaders and compactors, the two lines still to move to BS-V, arrive from September and will be repriced at that point. Models aimed at specific applications and at entry-level buyers follow from October.
Pricing
Emission-linked increases came through in two bands. Machines that went from BS-III straight to BS-V carried a 6-7% rise, while those moving from BS-IV to BS-V took 3.5-4.5%. Most of that was passed on in January 2025.
Commodity costs have since forced several smaller increases through the first half of this year. Including the January revision, the cumulative rise is about 5%, or closer to 6% once adjustments to channel discounts are counted.
"There is a pushback from the customer to the tune of they are taking longer time to decide, and it is taking a deeper negotiation," Bajaj said. He expects prices to settle during the second quarter, with demand acting as the leveller.
Heavy monsoon rain is the other near-term risk, supporting tractor demand while suppressing construction activity.