Not time to build yet for Indian companies

Low capacity utilization, subdued demand, a higher number of stalled projects, stressed balance sheets, a pile of bad debt with state-run banks and the global slowdown will continue to weigh on corporate capex

Krishna Merchant
Updated21 Mar 2016, 01:20 AM IST
Corporate capital investment is estimated to decline by 13%, year-on-year, in FY17 and FY18, each compared with the 5% decline estimated in FY16, according to Religare Institutional Research. <br />
Corporate capital investment is estimated to decline by 13%, year-on-year, in FY17 and FY18, each compared with the 5% decline estimated in FY16, according to Religare Institutional Research.

Indian companies are not expected to return to capital investment mode soon. Corporate capital investment is estimated to decline by 13%, year-on-year, in FY17 and FY18, each compared with the 5% decline estimated in FY16, according to Religare Institutional Research.

The capex analysis was done across the cement, power, metals, oil and gas, auto and fast-moving consumer goods—or FMCG—sectors for 50 listed companies.

Low capacity utilization, subdued demand, a higher number of stalled projects, stressed balance sheets of companies, a pile of bad debt with public sector banks and the global slowdown will continue to weigh on corporate capex.

It’s a long road ahead.

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