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Robust growth bolstered by private capex over the next few years could push the profit cycle to historical peak and beyond, but near-term may remain volatile
India's corporate capex spending is rising due to rising cash flows and improving balance sheets, with three out of four companies from a sample of 373 of the S&P BSE 500 index reporting year-on-year improvement in gross fixed assets for FY23. Mainly oil and gas, metals and power firms form a major part of incremental GFA.
India Inc is gradually stepping up capital expenditure, buoyed by improving balance sheets and rising cash flows, an ETIG analysis shows.
Tata Motors' market share for medium and heavy commercial vehicles in India dropped to a 10-year low in Q1 FY24, according to data from SIAM. The company's market share fell to 44%, down 560 basis points from the previous year. While bus volumes rose 42%, sales of goods vehicles fell 1.5%. The preference for higher tonnage commercial vehicles has impacted Tata Motors, a key player in the light and small commercial vehicle categories. In contrast, Volvo Eicher Commercial Vehicles and Ashok Leyland saw gains in market share.
According to ICRA, total investments made by the CV industry were estimated at nearly Rs 3,200 to Rs 3,500 crore during last fiscal, and a similar amount is expected for FY24 as well