Stock Market: Big preparations by the government! Incentives worth ₹16000 crores on construction equipment, these 3 stocks will be a big opportunity:

News Topical, Digital Desk : The Government of India is preparing to introduce a new incentive scheme for the construction equipment sector from the next financial year. Sources told English newspaper ET that around ₹13,000–16,000 crores can be spent on this scheme. Its purpose is to promote manufacturing in India and reduce dependence on imports.

Why is this scheme necessary- More than 50% of construction and mining equipment is imported in India. Most of these are imported from China, Japan, Korea and Germany. Currently, the size of the Indian construction equipment market is $9.5 billion and it is estimated that it will double by 2030.

If this scheme comes, domestic companies will get direct benefit of incentives and subsidies. This will reduce the cost, improve profit margin and increase demand.

Keep an eye on these stocks Action Construction Equipment (ACE): Demand for cranes and material handling equipment may increase. Escorts Kubota: A big player in construction and agri equipment, profitability may improve with government support. Sanghvi Movers: A leading company in cranes and lifting services, huge growth opportunities due to increased construction and mining activity. In simple words, this scheme of the government will boost domestic manufacturing and can become an opportunity for double growth for these companies in the coming years.

If this scheme comes, domestic companies will get direct benefit of incentives and subsidies. This will reduce costs, improve profit margins and increase demand. Action Construction Equipment (ACE): Demand for cranes and material handling equipment may increase. Escorts Kubota: A big player in construction and agri equipment, profitability may improve with government support. Sanghvi Movers: A leader in crane and lifting services, huge growth opportunities due to increased construction and mining activity.
Performance and valuation of stocks-1. Action Construction Equipment (ACE) Performance: The stock has given around +45% return in the last 6 months. Driver: Consistent demand due to the theme of infra and manufacturing boost. Valuation: The stock is currently trading at ~28x FY26 PE, i.e. growth potential still exists in the mid-cap space.

2. Escorts Kubota- Performance: Rise of about +30% in the last 6 months. Drivers: Strong order book in both tractors and construction equipment. Valuation: Trading at ~22x FY26 PE, slightly above the sector average. Margin improvement possible with the scheme in the long term.

3. Sanghvi Movers- Performance: The stock has given around +60% return in 6 months, counted among high-growth stocks. Drivers: Huge demand from power, mining and construction projects. Valuation: The stock is trading at ~18x FY26 PE, i.e. despite strong growth, the valuation is attractive right now. Government incentives can increase both the demand and profitability of this sector. The business model of these three companies is directly linked to construction equipment, so there can be an opportunity for double growth in the long term.