Power, real estate are bright spots amid India’s capex gloom

their revenue to capital expenditure between FY23 and FY25. Their decision to keep their powder dry highlights a widespread and persistent trend of corporate timidity amid uncertainties.

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This pool largely comprises sectors traditionally less capital-intensive, such as IT, FMCG, consumer durables, and agriculture and allied sectors.

Crucially, however, even capital-heavy sectors like automobiles, capital goods, and oil and gas have joined this cautious majority post-covid.

Meanwhile, one-third of India Inc. occupied the crucial middle band, committing 5-15% of their revenue to capex over the last three years, on a median basis.

This band has emerged as India Inc’s investment sweet spot, housing a blend of fast-growing and consumer-facing sectors.

For instance, consumer-facing industries like retail sit just above the 5% threshold, while healthcare and travel, both riding strong demand tailwinds, spent 6-7%.

This puts their typical capex inline with traditional heavyweights like metals and mining. Additionally, chemicals and textiles saw outlays of 7% and 10%, respectively.

Towards the higher end of the spectrum, companies willing to open the investment spigots are rare.