Mumbai: Capital expenditure by private firms may decline by an annual rate of 11% in the year beginning 1 April, according to a survey conducted by rating agency Crisil.

Responses from 192 listed firms, both private and state-owned, showed that overall capex may contract by 4% in 2015-16 on muted investment intentions despite hopes of a revival in economic growth in the next couple of years.

The polled sample of companies across sectors such as infrastructure, energy, metals, cement, auto, pharma and textiles accounted for 45% of all companies listed in 2013-14 on the National Stock Exchange but excluded banking, financial services and insurance firms.

“While 90% of the companies polled were of the opinion that sentiment has improved on the ground and capex should begin to recover by the next fiscal, ironically, near-term plans for their own companies belied this optimism," the rating agency said in a statement on Tuesday.

The biggest decline in capex is likely to come from the manufacturing sector, while sectors like infrastructure and energy are expected to see a small increase, showed the survey.

“More than 80% of the capex is expected to be from energy (mainly oil and gas), infrastructure (mainly power and roads) and metals sectors in 2015-16—just the way it was expected to be in 2014-15. Bulk of these is in projects under implementation and expected to be incurred next fiscal," Crisil said.

While there may be pockets of fresh investment in some segments of manufacturing, an across-the-board, meaningful pick-up in the capex cycle will only come when there is a visible improvement in demand, the survey said.

“The message coming through is crystal clear: as things stand, there is only one way to kick-start the all-important investment cycle, and that is through public investment," Raman Uberoi, president, ratings, Crisil, said in the statement. “The onus is on the government to do the initial heavy lifting."

The survey added that about the 74% of the capex being planned is by companies with a high ability to carry it out, while only 8% is by those with lower ability.

“What this means is that amid softening interest rates and buoyant capital markets, funding is unlikely to constrain investments," said the report.

“If there is one thing corporates are looking for, it is better visibility in terms of a sharp improvement in demand. This seems to be the real reason behind the hesitation to commit larger monies, " said Prasad Koparkar, senior director, Crisil Research.