29 Mar 2022 , 03:24 PM
ICRA has conducted a comprehensive survey of CE dealerships in March 2022, among 18 MCE dealerships encompassing 13 OEMs, eight equipment segments spread across 12 states (Madhya Pradesh, Maharashtra, Orrisa, Kerala, Karnataka, Uttar Pradesh, Delhi-NCR, Haryana, Gujarat, Telangana, Jammu and Rajasthan). The findings indicate majority (78%) of the respondents expecting year-on-year (Y-o-Y) volume decline of ~10% during Q4 FY2022, however, they expect volume growth of around 7% in FY2023.
The survey further, indicates a 10%-20% increase in prices of equipment, mainly due to increasing input cost along with change in emission norms. The equipment utilization levels moderated primarily due to extended monsoon and its impact on the infrastructure activities. A lower number of respondents, only 64% highlighted a utilization level of over 70 % as compared to 77% respondents during Nov-2020 survey. The rentals continue to remain under pressure. A majority of respondents indicated that inventory holding has come down to up to 30 days, compared to up to 60 days of inventory, pre-Covid. Also, most dealers reported a tighter lending environment, with loan to value (LTV’s) reduced by 500 bps compared to pre-Covid era for the first-time buyers (FTB) segment.
On the outlook, Mr. Agrawal said, “ICRA’s outlook on the mining and construction industry continues to remain stable, with expectations of a pick-up in demand following continued thrust on infrastructure by the GoI in the Union Budget 2022-23. Nevertheless, tightening of LTVs by financiers, muted rentals and continued increase in equipment prices poses downside risk to demand estimates.”
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