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
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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