IGI Logo

Capex momentum on track

We put down a list of industrial indicators that represents capex spends for FY22.

Centre’s capex is up 20% YoY on YTD basis (Apr-Feb’22), giving the economy an initial push to lift sentiment and boost consumption volumes.

Large CPSEs sustained pace of capex to INR 5.8 tn in FY22, attaining c.97% of the capital expenditure target for FY22.

State capex stood at INR 3.3 tn on YTD basis (Apr-Feb’22), recording robust growth of 34% YoY (+18% over FY20 YTD).

Private sector capacity utilization improved to 72% in 3QFY22 from 68% in 2QFY22, showcasing normalization.  RBI’s data on 2,744 private companies indicates revenues surpassing 3QFY20 levels by 29%, with better operating margins of 16.7%

IIP index growth continues to sustain barring select segments like consumer durables/non-durables, indicating sustenance of industrial growth ahead.

Cement, steel, consumer-linked industries and freight movement are witnessing steady growth on the back of pickup in economic activities with normalisation.

IHS Manufacturing PMI declined to 54.9 in Feb’22 (vs 57.5 in Feb’21). Order inflows were up 26% YoY and grew 22% vs 3QFY20, while ex-BHEL it was up by 34.1% YoY, and surpassed 3QFY20 levels by 44%.

Engineering exports witnessed a sharp uptick of 55% YoY during Apr-Feb’22 (+45% over FY20 YTD).

Uptrend in bank credit shaping: Non-food gross bank credit went up 8% YoY (till Feb’22). Infrastructure rose 12% YoY and lending to roads grew 20.1% YoY.

Our top picks are Bharat Electronics, ABB India, GMM Pfaudler and Tega Industries

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://www.jmfl.com/disclaimer

CIN Number : L67120MH1986PLC038784

Above views are of the author and not of the website kindly read disclaimer