Capex Tracker - India’s Investment Rate Subdued In 9MFY23: Motilal Oswal

Motilal Oswal Report

About 18 months ago, the optimism surrounding the capex recovery in India gathered momentum. The sharp, financial recovery of listed companies was seen as the harbinger of the capex-led recovery in the country. However, we remained skeptical of the building optimism and published a note detailing the key traits of India’s investments.

In this note, we present a tracker of India’s investments, covering 13 monthly and six quarterly indicators. This regular update is intended to equip readers with India’s capex/investment story, along with its key drivers. We have divided these indicators into three parts based on the economic agents – Household, corporate, and government.

The corporate sector accounts for less than half of the total investments in India, followed by 38-40% by the households (primarily residential real estate) and the remaining by the government (center and states).

Overall, household capex has dried up suddenly in Q3 FY23, with a contraction in fiscal capex (led by the center). The former raises doubts if the end of discretionary consumer spending is up on us. This was, however, entirely offset by a sharp surge in corporate investments.

Rising interest rates, fading of base effect, and general economic uncertainties indicate that the investment climate could remain somber in the near future.

Click on the attachment to read the full report:

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This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

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