Boosted by growth in the mining and infrastructure sectors, major construction equipment maker Tata Hitachi is bolstering its product portfolio to reach revenue of Rs 4,800-5,000 crore by FY 2023-24 (FY24) , a senior company official said on Tuesday.
The company, which has a major manufacturing plant and R&D centers in Kharagpur, West Bengal, achieved revenue of around Rs 4,000 crore in the 2021-22 financial year, despite a moderate demand due to COVID-induced headwinds.
“Now the demand has started to increase for construction equipment. Mining is outperforming the infrastructure segment. Targets for coal mining are very high following a shortage of dry fuel in The government’s aggressive road construction target of about 25,000 km in two years and about 22 green expressways will boost the heavy construction equipment industry,” said Sandeep Singh, Managing Director of Tata Hitachi Construction Machinery Company, to PTI in an interview.
He expects the construction equipment industry to grow by at least 10 to 15 percent in the current fiscal year despite commodity-driven inflationary pressures, he said.
“The sharp rise in raw material prices, especially steel, has put enormous pressure on construction equipment manufacturers, who have been forced to pass some of this on to customers and drive up costs. across the construction value chain. That put pressure on margins,” Singh said.
“However, amid these headwinds, we remain bullish on demand for government and private sector equipment. We are targeting a headline of Rs 4,800-5,000 crore by FY24,” Singh said.
Private sector contracts now contribute about 10% of its revenue, but this will rise to 15% over the next two years with a greater push for privatization in the mining sector, he said.
Coal India is also aiming for a production target of one billion tonnes over the next few years, the official said.
The OEM continues to introduce products to meet demand. After the launch of the five-ton wheel loader used in the mining industry, Tata Hitachi’s product shop in this segment is complete, he said.
Three- and five-tonne wheel loaders account for 80% of the market.
The annual market size of such equipment is 3,000 units, another official said.
Tata-Hitachi manufactures excavators from 2 to 120 tonnes at its factories in Dharwad and Kharagpur and employs around 4,000 people.
The size of the Indian excavator industry is 25,000 units per year.
The company has been continuously working towards “greater localization”, he said, adding that it has already reached 70% of the target for the same and plans to increase it to 80% in two years.
Speaking of the Kharagpur plant, he said the company had pumped Rs 1,200 crore into the facility so far and would review the investment plan for further capacity expansion after two years. According to a Boston Consulting Group report, India will be the second largest producer of construction equipment by 2030, with revenue reaching $25 billion and sales volume touching three lakh units, resulting in the creation of 30 lakh new jobs.