India Capex – present tense, future hopeful
As per the latest data available, the capital expenditure (capex) growth the new project announcements were down significantly in 3QFY21, the quality of projects has improved materially. The new public sector projects are mostly in infrastructure sector, with state governments taking the lead over central government. The private sector projects are mostly in manufacturing sector driven primarily by the production linked incentive (PLI) scheme announced by the central government. On the consumption side, the real wages for non-government non-financial sector have continued to decline for fourth successive quarter in 3QFY21. The employee cost for this sector is presently at lowest level in a decade. I note the following trends from some recent brokers’ reports relating to new capex. Phillips Capital analyzed the recent capex data published by CMIE and noted the following: · New projects announced in 3QFY21, at Rs 801bn, were lower 22%...