Ashok Vaswani, MD & CEO, Kotak Mahindra Bank (KMB): “In the CE segment, and certainly at the sector level, we have seen quite a slowdown. And a large part of this slowdown is due to the fact that the demand from state governments for CEs has come down somewhat. We hope this picks up and the overall sector level goes up. Our growth is largely in line with the sector level.”
Umesh Revankar, executive vice-chairman, Shriram Finance, said CE’s share of the NBFC’s total assets under management fell further in the third quarter. “There is a slowdown in overall construction activity, especially in the infrastructure sector. Future demand will depend on the Union Budget, at least we will know what projects were implemented in the last fiscal year and what plans are in place for the next fiscal. Everything depends on the plans of the Finance Minister,” he said.
Shriram Finance’s CE loans stood at Rs 14,219 crore in the third quarter, down 20 percent year-on-year (yoy) and 7 percent quarter-on-quarter (qoq). The share of CEs in the NBFC’s assets under management fell to 4.87 per cent in the third quarter from 7.02 per cent a year ago. KMB’s commercial vehicle and CE book rose just 2 percent qoq to Rs 44,517 crore. CE loans contributed to 2.3 percent of Tata Capital’s net assets under management in the third quarter, down from 2.5 percent a quarter ago.
CE sales delay
According to industry body Indian Construction Equipment Manufacturers’ Association (ICEMA), overall CE sales in the third quarter of 2026 declined 9 percent year-on-year, and total industrial volumes stood at around 94,000 units between April and December 2025, down 5 percent due to a 10 percent contraction in domestic sales, while exports grew strongly at 28 percent.
Deepak Shetty, President, ICEMA and MD, CEO, JCB India, said domestic demand for CEs remained subdued in calendar year 2025. The growth of the CE industry is critically dependent on infrastructure development projects that have faced some headwinds, he says. “This has also been a period of adjustment for customers after the CEV Stage V emission norms came into effect, which impacted the asset value of our products. However, on a broader level, we remain hopeful that demand will return as infrastructure development has always been an area of ​​focus for the government, especially rural infrastructure, which is a key growth driver for our industry,” Shetty said.
“Encouragingly, initial signs of stabilization have been seen in recent months, with December recording a month-on-month improvement in overall sales, despite a year-on-year decline. With faster project awards at the central and state levels, improved execution at the state level and supportive policy measures, especially higher infrastructure investment and better credit availability, the industry remains optimistic about a recovery in domestic CE demand in the coming quarters,” he added.
Narendra G Kamath, COO – SME Finance, Tata Capital, said while December showed early signs of stabilization with sequential improvement in sales, lending is likely to pick up meaningfully only as project awards accelerate, execution improves and cash flows normalize at the contractor level. “From a lender perspective, we view this as a critical transition phase and remain optimistic about a recovery as infrastructure spending regains momentum,” he said. END
Published on January 25, 2026
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