India Capex Tracker - Corporate Investments Grow Slowly In 9M FY24: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.For the fifth consecutive quarter in Q3 FY24, real investments in India grew much faster than consumption. After a 6.9% growth in FY23, real investments jumped 12.2%/10.1% YoY in Q3/9M FY24, much higher than the growth of 2.7%/3.6% YoY in real consumption (private + government). However, it is important to note that the (nominal) investments stood at 33.2% of GDP in 9M FY24, compared to 32.6% of GDP in 9M FY23, and the highest in the corresponding period of the past nine years. This regular update is intended to track India’s capex/investment trend and its key drivers. Here are the key highlights: Firstly, government investments (center + states) continued to grow very strongly – up 36.6% YoY in Q3 FY24 (implying 35.5% growth in 9M FY24). The Center’s investments surged 65.1% YoY (versus a decline of 31.2% YoY in Q3 FY23), while states’ capex rose 15.9% YoY in Q3 FY24 (versus 14.0% YoY in Q2 FY23). Compared to an average of 3.6% of GDP in the 2010s decade, fiscal investments were 4.8% of GDP in 9M FY24, with the Center’s capex rising to 2.7% of GDP from 1.5% of GDP. Accordingly, the government sector accounted for 15% of total investments in 9M FY24, up from an average share of 11.3% in the 2010s decade. It also means that private investments (including public sector enterprises, PSEs) grew 8.8%/7.6% YoY in Q3/9M FY24 versus 10.2% in the 2010s decade.Thirdly, using data on stamp duty & registration fees collected by states, our estimates suggest that household investments (primarily including residential real estate) increased 11.7% YoY in Q3 FY24, following a growth of 17.9% YoY in Q2 and the average growth of 26% during the past two years. Lastly, as a residual, we find that corporate investments (including PSEs) increased by only 6.5% YoY in Q3 FY24, the highest growth in three quarters but much weaker at 2.6% YoY in 9M FY24, versus ~25% growth in the last two years. The share of the corporate sector, thus, appears to have stabilized at 46-47% of total investments, lower than ~50% in the pre-Covid decade. Overall, a strong residential property market holds the potential to boost economic activity, and the government’s focus on infrastructure is commendable. However, weak personal income growth, high interest rates, fiscal consolidation, and high economic uncertainties create vulnerabilities about the durability of the strong growth in investments..Click on the attachment to read the full report:.Cement Sector Check - Prices Remain Under Pressure But Volume Shown Improvements: Systematix.DISCLAIMERThis report is authored by an external party. NDTV Profit 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 NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

India Capex Tracker - Corporate Investments Grow Slowly In 9M FY24: Motilal Oswal

For the fifth consecutive quarter in Q3 FY24, real investments in India grew much faster than consumption.

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India Capex Tracker - Corporate Investments Grow Slowly In 9M FY24: Motilal Oswal

For the fifth consecutive quarter in Q3 FY24, real investments in India grew much faster than consumption.

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