The concern today is the pricing as most of the players are operating at wafer thin margins.

 Led by strong push to road, railways and power sector development by the Centre, the domestic construction equipment (CE) industry is on a path to gradual recovery after a period of sustained contraction, according to Rajinder Raina, General Manager-Marketing, Escorts Construction Equipment Ltd – one of the major CE manufacturers in the country. Excerpts from his interview:

Escorts reported a growth of 45 per cent in its construction equipment (CE) sales in terms of volume in QE June 2016. How do you look at this performance?
Our performance in first quarter (Q1) of the current fiscal has been good wherein Escorts posted a growth marginally higher than the served market. The growth over the previous years is a combination of growth of the industry and our increased market share. We had geared up for the growth along with our vendors to ensure that the opportunity was not missed.

What about the overall performance of CE industry?
The first quarter of current fiscal has been very good for the industry as a whole. An overall growth of 44 per cent is fairly robust by any standards. The concern today is the pricing as most of the players are operating at wafer thin margins. It’s going to be tough but high growth for the next two to three years looks very much on.

Do you see the demand sustaining itself in near future?
The short and sharp answer is yes. The second half of the current financial year is expected to post 30 per cent higher growth compared to the first half.

What makes you so optimistic?
Ministries, particularly, Road Transport & Highways, Railways and Power are doing exceptionally well. They are truly in a missionary mode. The packages of work awarded, tendered for and in the pipeline are the reason enough to be optimistic. Rest of the enablers are also in place. Implementation of GST by next year should be the icing on the cake.

Are there any specific industry segments where green shoots are visible?
Roads stand out as a clear frontrunner followed by Railways and Metro rail. Smart cities will throw up demand in a big way and for a long time. Dedicated irrigation funds provided for in the budget coupled with the decent monsoons augers well for earthmoving industry.

Would you like to focus more into new product development or offering services?
This is not an either or case. After sales service has historically been the core of our marketing. Escorts was the first one to introduce the concept of dealership in this industry. Proximity to the work sites through a quality footprint of parts and service outlets sets us apart.

As for new products, we have been moving the market up in Pick-n-Carry cranes. A new backhoe loader has been launched and a new crane will be launched soon. Introduction of new products is a part of product evolution for Escorts.

Could you explain us about your latest Backhoe Loader highlighting its unique features?
Escorts Backhoe Loader Digmax II is established as one of the best in India, if not the best in class.  It offers the best package on the technical specifications and delivers the maximum output at the lowest cost of operations per unit output. The customers endorse our claim about Digmax II and the competition also acknowledges this fact.