The Indian government is reportedly considering an incentive package of up to ₹23,000 crore in the upcoming Budget 2026. The goal is to accelerate domestic manufacturing of capital goods and promote Make in India products, reducing dependence on imports. (Note: Financial Express could not independently verify these reports.)
The construction equipment sector could receive incentives worth approximately ₹16,000 crore, while the automobile sector is targeted for ₹7,000 crore to build global value chains. Support for construction equipment followed China’s restrictions on tunnel boring machine exports, which disrupted infrastructure projects in India previously. However, they were lifted last year.
Support for the auto sector will target advanced automotive components such as Advanced Driver Assistance Systems, 360-degree cameras, sensors, and other high-technology parts, with a provision to promote at least 50% domestic value addition. In this article, we have highlighted three stocks that could benefit from the construction sector incentive…
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#1 ACE: Dominating the crane market with a strategic defence pivot
Action Construction Equipment (ACE) is a diversified construction Equipment Manufacturer. It manufactures construction equipment, including cranes and material handling equipment. ACE serves sectors including infrastructure, Manufacturing, Logistics, and the agri-sector. It has a presence in both domestic and global markets, exporting to over 37 countries.
The 63% crane dominance
In fact, ACE is the world’s largest pick & carry Crane manufacturer and holds over 63% market share in Mobile and tower cranes. In the backhoe loader segment, a significant focus area, ACE aims to increase its market share from roughly 2.5% to double digits. In the heavy crane segment, ACE aims to achieve 50% market share within the next 3–4 years.
Among end-user sectors, manufacturing and logistics (45%), infrastructure (35%), real estate (13%), and agriculture (7%) contributed the most. With such diverse exposure, ACE could be a major beneficiary. A notable strategic development for ACE is its expanding presence in the Defence sector.
The ₹420 crore defence breakthrough
ACE received its first-ever order (₹420 crore) from the Ministry of Defence for 1,121 rough-terrain forklifts. It is awaiting a No Objection Certificate to begin executing the order book. It expects execution to begin in Q4 and continue into FY27. ACE aims to increase export revenue share to 8-10% and defence share to 5-8% in the medium to long term.
ACE’s roadmap to a ₹6,000 crore revenue target
The company targets revenue of ₹4,000 crore (lower end) by the end of FY27 and ₹6,000 crore by FY29-30, from ₹3,327 crore in FY25. Growth will be supported by the transition to BS-V emission norms, which has led to a 15-20% increase in realizations. On a blended basis, the company expects an 8-9% price increase due to technology upgrades.
Countering the China factor
The government’s recommendation to impose anti-dumping duties on Chinese crawler and truck cranes (ranging from 26% to 52%) could be a major tailwind. This is expected to curb aggressive pricing by Chinese players and enable ACE to compete more effectively in the heavy crane market. With these duties, ACE estimates an incremental revenue of ₹500-1,000 crore over the next 3-5 years.
To support its growth targets, ACE is undergoing expansion, including the acquisition of 86 acres of land. Its current production capacity can support revenues of over ₹5,000 crore. Additionally, ACE is focusing on premiumization. It is also finalizing a joint venture with Kato Works, a five-decade-old Japanese company.
