Tag: capex

Aarti Industries sees agrochem demand stabilising by FY25 second half

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Rajendra V Gogri, CMD of Aarti Industries, an Indian manufacturer of speciality chemicals with a global footprint, expects agrochemicals demand to stabilise by the second half of the next financial year (FY25). On the discretionary side, demand has already started picking up, he said.

The agrochemicals sector has been facing significant challenges over the past few quarters. In July last year, there was a slew of profit warnings from global chemical companies as well, highlighting the weak demand environment, Chinese dumping, inventory de-stocking by customers, and falling prices. One of the chemical majors even called the situation ‘Lehman-like’.

Gogri also provided details on the company’s planned capital expenditure plan for this year and the next year. The company has outlined capex of around ₹ ₹2,500-3,000 crore over two years including ₹1,200-1,300 crore for FY24.

The overall debt is around ₹2,900 crore and it could increase in FY25.

Among chemicals, he said, benzene and toluene prices have seen an increase due to a rise in crude prices.

Toluene and benzene are present in various items including gasoline, nail polish, hair dye, acrylic spray paint, aeroplane glue, plastic cement, cleaning products, and paint thinners.

Also Read | Aarti Industries shares jump 7% after signing second long-term contract in a month

In Q3FY24, Aarti Industries reported a revenue of ₹1,740 crore, slightly up from ₹1,667 crore in Q3FY23. The operating profit margin declined to 15.4% from 17.3%. The profit after tax (PAT) declined to ₹124 crore from ₹137 crore last year.

The market capitalisation of Aarti Industries is around ₹24,389.27 crore. Its shares have gained close to 25% in the past year.

Also Read | Himadri Speciality Chemicals to spend Rs 4,800 crore for lithium-ion battery components foray

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Neelkanth Mishra lists key investment themes for next 12-18 months

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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“Themes like defence, electronics, and financials are going to be the areas of interest for us for next 12-18 months,” said Neelkanth Mishra, Chief Economist, Axis Bank, Head-Global Research, Axis Capital in an interview to CNBC-TV18.

Mishra expects investors to remain cautious ahead of elections. However, investments will be back post-elections.

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For the market, the earnings momentum and near-term valuations should play a much more important role and he believes that the Indian economy will continue to outperform the global setup.

Therefore the domestic cyclicals – companies that are more focused on the domestic economies – are likely to do well, he stated.

Sharing his views on banking sector, he said, “Banking sector as a whole seems to be oversold.” This, he said, was largely because of worries over excessive tightening of liquidity conditions. “But at some point, I think given that the credit demand is strong, and the bank as some pricing discipline sets in, I think some of the concerns that have plagued the sector should disappear.”

Also Read | Tata Power shares fall 7% on weak Q3 performance; key variables to watch out for over 12-18 months

He also shared his views on capital expenditure (capex) increase in sectors like railways, urban housing infrastructure, roads is in single digits. Over the last couple of years, the government has done the heavy lifting in terms of spending, and “I think that the government’s withdrawal of support is an attempt to calibrate its own presence in the economy given that the debt to gross domestic product (GDP) levels are higher than comfort levels.”

Mishra expects the industrial sector to be driven primarily by the private sector capex and pickup in construction, both in residential and commercial spaces, over the next three years.

For more, watch the accompanying video

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Budget 2024 | Sustained capex push crucial, says Mihir Vohra

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Finance Minister Nirmala Sitharaman is set to present her sixth budget under the PM Narendra Modi-led administration on February 1. Since the Lok Sabha elections are scheduled in the summer of 2024, the upcoming budget will be a vote-on-account or an interim budget.

In an interview with CNBC-TV18, Mihir Vora, Chief Investment Officer at Trust Mutual Fund, shed light on the significance of ongoing capital expenditure (capex) trends.

Vora emphasised the remarkable growth in capex, particularly in the construction sector, with a staggering 30% increase over the last three years. However, as the nation enters an election year, Vora will closely watch the capital expenditure outlook, given the prevailing focus on subsidies and revenue expenditure.

Former Secretary of Finance SC Garg shared insights on the expected budgetary focus, predicting a substantial emphasis on direct benefit transfers, including cash handouts to specific demographics such as women, youths, and farmers.

Also Read | Budget 2024: Former finance secretary SC Garg predicts robust direct benefit transfers and substantial capex boost

Meanwhile, reflecting on the government’s past focus on capital expenditure (capex), Garg believes that there could be a notable increase of around 25% for crucial sectors such as railways, roads, highways, and defence. This strategic investment is seen as a winning point for the government’s economic agenda.

Also Read | Budget 2024: FICCI recommends capex push, MSME lending for Indian economy

For more details, watch the accompanying video

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Endurance Technologies will spend ₹37 crore to expand capacity at Aurangabad units

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The board of automotive components manufacturer Endurance Technologies has approved expanding capacity for aluminium die casting and machining of automotive components, it said in an exchange filing.

Expansion of the capacities will take place at its existing units in Waluj, Aurangabad. The company will spend ₹37 crore for this capacity expansion, which will be funded through their internal accruals.

The expanded capacity will cater mainly towards electric two-wheelers. The company cited increased demand from OEM customers as the rationale behind this capacity expansion exercise.

As of date, the units have an existing capacity of 10,000 sets per month, utilisation for which is currently at 98%, according to the company.

Endurance plans to add capacity worth an additional 30,000 sets per month. The expansion exercise is likely to be completed by May 2024, it said.

With a market capitalisation of nearly ₹28,000 crore, Endurance Technologies is a supplier of parts for two-wheelers and three-wheelers in India and car parts in Europe.

The company was started in 1985 by Anurang Jain, nephew of the late Rahul Bajaj to supply aluminium castings to Bajaj Auto. Promoters currently own a 75% stake in Endurance Technologies.

Shares of Endurance Technologies are trading around the mark of ₹2,000 per share and have risen 35% over the last 12 months.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India likely to bank on higher capex to accelerate growth, say sources

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As all eyes are on the upcoming interim budget, sources have told CNBC-TV18 that the government is yet again going to bank on a higher capex to accelerate growth. 

According to highly placed sources who did not wish to be identified, there is a proposal to push for at least a 15-20% hike in capex, which could be announced in the upcoming interim budget. The government had earmarked ₹7.5 lakh crore for capex in FY23, which was increased to ₹10 lakh crore for FY24. 

The sources revealed that a large chunk of capex will focus on infrastructure and strategic ministries, including the Ministry of Road Transport and Highways, the Railway Ministry and the Defense Ministry, in addition to driving growth and employment. Moreover, capex will also provide the much-needed cushion against global headwinds through crowding-in private investment. 

Additionally, the government believes that capex has a tangible multiplier impact on manufacturing industries raw materials like cement, steel and construction equipment.

Fund Allocation

In road infrastructure, capex will focus on funding the expansion of four-lane highways, Greenfield Expressways and Access-Controlled Corridors. 

In addition, for railways, capex will help in further modernization—modern stations, station redevelopment, implementation of Kavach systems, laying tracks and electrification, as per sources. “capex will also aid in expanding semi-high-speed Vande Bharat Express trains, the Amrit Bharat Express, and the expansion of railway connectivity in the North East,” sources added.

Additionally, capex is expected to aim for boosting infrastructure development, defence modernisation and exports, and further strengthening of border road infrastructure, along with a focus on Nari Shakti and ensuring the welfare of ex-servicemen. 

The Budget 2023 saw the capex outlay rise for the third consecutive year to ₹10 lakh crore. Budget 2023 capex outlay was 3 times, 4 times and 5 times the outlay of Budget 2020, Budget 2017 and Budget 2014, respectively.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Coal India Capex records 7.6% YoY growth to reach ₹10,492 crore in Apr-Nov FY24

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Coal India Limited‘s (CIL) capital expenditure increased by ₹741 crores in the eight months ending November FY 2024 to ₹10,492 crores, which is 7.6% higher than ₹9,751 crores in the corresponding period last year. A senior executive of the company has said that it is striving to achieve around 80% of the current financial year’s total targeted Capex of ₹16,500 crores by the third quarter ending in December 2023.

CIL’s intensified focus on strengthening coal evacuation infrastructure in its mining areas saw the capex under three heads go up to ₹3,247 crores, which represented 31% of the entire capex till November 2023. A capex of ₹1,842 crores was deployed in setting up of railway sidings and corridors; ₹1,292 crores were spent in construction of coal handling plants (CHPs) and silos for mechanized transportation of coal including weighbridges and ₹113 crores were spent in establishing roads.

The capital expenditure on acquisition of land and related rehabilitation amounting to ₹2,486 crores accounted for almost a quarter of the total capex during the period of April to November FY 2024. The procurement of heavy earth moving machinery (HEMM) witnessed a spend of ₹1,954 crores, while diversification and joint ventures like Solar and Hindustan Urvarak Rasayan Limited and Talcher Fertilizers Limited saw a spend of ₹1,040 crores. The remaining capex heads were mine development, exploration, prospecting, ERP and other residuals.

The senior executive of the company described land and HEMM as the major Capex heads that catalyze production growth, pointing out that investments are being increased to prioritize the existence of a robust coal evacuation infrastructure to transport increased volumes of coal in future. As in the previous financial year, in FY 2024 the bulk of CIL’s capex is focused on the three transport infra projects. Together these heads add up to ₹6,441 crores, out of the fiscal’s targeted capex of ₹16,500 crores.

CIL’s capital expenditure which used to hover between ₹6,000 and 7,000 crores took off sharply in FY 2022 to ₹13,284 crores, doubling over FY 2021 levels. During three successive financial years till FY 2023, CIL’s capex exceeded its budgeted target.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

States fail to meet capex targets due to revenue fall, other factors: Report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Several states are likely to miss their capital expenditure targets for the ongoing fiscal due to polls and a fall in revenue, according to an analysis. A steep fall in revenue receipts will further lead to a major compression in state capex, which during the first half of FY24 rose to a record 35 per cent, Icra Ratings Chief Economist Aditi Nayar said.

To maintain their Budget estimates, 21 states — whose capex and other macro data are available — will have to ensure that the capex run rate is maintained at 28 per cent in the second half, which is unlikely since the model code of conduct is likely to take effect in the March quarter before the general elections, Nayar said.

The combined revenue and fiscal deficits of these 21 states widened to Rs 70,000 crore and Rs 3.5 lakh crore, respectively, in the April-September period, from Rs 50,000 crore and Rs 2.4 lakh crore, respectively, in the year-ago period.

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The report excludes Arunachal Pradesh, Assam, Goa, Manipur, Meghalaya, Mizoram, and Nagaland. While the growth of combined revenue receipts and expenditure of these 21 states in the period under review trailed Budget estimates, their capital outlays and net lending was higher.

This was boosted by the early releases under the scheme for special assistance to states for capital investments (or capex loan) in the April-October period of the current fiscal, Nayar said. This contributed to the increase in capex as a proportion of Budget estimates to 35 per cent in the first half of the fiscal from the previous year’s average of 30 per cent, she said.

Revenue receipts and expenditure increase by sub-10 per cent in the April-September period were significantly below the growth budgeted for the year.

The growth in combined revenue receipts of the 21 states slowed to 8.4 per cent in the period under review from 26.4 per cent in the year-ago period, mainly led by a sharp contraction in grants from the Centre. Simultaneously, the annualised growth of combined revenue expenditure of these 21 states eased to 9.6 per cent in the first half from 15.5 per cent a year earlier.

Moreover, both revenue receipts and expenditure trailed the 18-19 per cent expansion indicated in their Budget estimates. Barring Himachal Pradesh, Karnataka, Kerala, Punjab, and Bengal, the capital expenditure of the remaining 16 states expanded in high double-digits.

Also Read: Who will the Government of India turn to get near the divestment target in FY24?

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India relaxes capex norms for ministries in projects above Rs 500 crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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To boost capital expenditure (capex) and accelerate economic growth, the government has extended relaxations for capex by ministries and departments. The relaxation of stipulations, announced by the government, aims to streamline the process of executing large-scale projects and provide greater flexibility to the concerned authorities.

According to the government, the relaxation of stipulations for capex has been extended for projects exceeding Rs 500 crore. Previously, ministries and departments were required to seek prior approval from the Finance Ministry for capex projects of this magnitude. However, with the latest decision, such projects will no longer require the Finance Ministry’s nod.

Moreover, the relaxation in stipulations for capex has been extended specifically for the second quarter of fiscal year 2023-24 (Q2 FY24). To ensure the continued availability of such relaxations, the government has also said separate advisory guidelines will be issued for capex in subsequent quarters.

It is important to note that capex covers significant releases of grants-in-aid and centrally-sponsored schemes. By extending relaxations for capex, the government aims to encourage ministries and departments to expedite project implementation, leading to improved public service delivery and overall socio-economic development.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

States spent only 76.2% of budget capex targets in FY23 against 95% in FY22: BoB analysis

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Most large states have fallen behind their budgeted capex targets by a wide margin in FY23. States were allocated Rs 7.4 lakh crore but could spend only Rs 5.71 lakh crore or 76.2 percent, according to an analysis by Bank of Baroda economists. As against this, in FY21, the underachievement level was a high 72 percent, primarily due to the pandemic emergency spending, and had improved to 95 percent in FY22.

Only four states, Karnataka, Sikkim, Arunachal and Bihar, over-achieved their targets, while Jharkhand and Madhya Pradesh’s capex spending stood at 98 percent each.

The poor show was led by Andhra Pradesh, which could spend only 23.1 percent of the Rs 29,917 crore budget target for FY23, followed by Haryana with 48.1 percent of the Rs 22,047 crore, and Rajasthan managed to cross the halfway mark (50.2 percent) of the Rs 39,148 crore.

This is dismal as the Centre government had met its obligations in terms of loans disbursed to the states for capex. It also met its fiscal deficit target, the report stated.

Tripura could spend only 41.3 percent of Rs 5,285 crore and Nagaland spent 47.7 percent of the Rs 16,650 crore, the analysis showed.

Maharashtra, which spent 72.4 percent of Rs 60,499 crore, and Uttar Pradesh, which spent 69 percent of Rs 1,35,677 crore, fared poorly, thus bringing down the all-state average to 70 percent or thereabout, according to the analysis. The two states got a combined budget capex of Rs 2.19 lakh crore, which was 29.2 percent of the total capex of 25 states for which data is available.

Surprisingly, Kerala, which is a traditional laggard, achieved 69.4 percent of the budget capex of Rs 19,330 crore and Uttar Pradesh spent 69 percent of Rs 1,35,677 crore. Uttarakhand spent 68.4 percent of the Rs 11,987 crore. Meghalaya spent 67.8 percent of Rs 3,233 crore, and Bengal spent 67.6 percent of Rs 33,144 crore, Assam spent 64.5 percent of Rs 24,064 crore, Punjab spent 61.1 percent of Rs 10,930 crore and Telangana spent 59.6 percent of Rs 29,064 crore.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India’s corporate investment as percentage of GDP is still below pre-COVID level

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The economic landscape is constantly evolving, influenced by various factors, including government policies, market conditions, and unforeseen events. In recent years, the investment patterns in many economies have experienced notable changes.

One significant trend in recent times has been the decline in corporate investment as a percentage of the Gross Domestic Product (GDP). Previously considered a key driver of economic growth, corporate investment has witnessed a substantial slip, falling to 14 percent of GDP.

This decline has raised concerns among economists and policymakers, as it indicates a potential slowdown in private sector activity and its impact on overall economic performance.

In an interview with CNBC-TV18, R Shankar Raman, whole-time director and CFO of L&T; Nikhil Gupta, chief economist at Motilal Oswal Financial Services and Hetal Gandhi, director of CRISIL discussed the current state of corporate investment and government capital expenditure (capex) and highlighted the shifts observed in these crucial sectors.

Also Read | Indian economy remains resilient, inflation well under control: Sanjiv Puri

Raman said, “Some of the sectors where the investments are coming are commodity-related sectors, automobile-related sectors, construction equipment sector, hospitals, and energy transition. I think a lot of investments are happening either in adopting greener fuel or reducing the emissions of the current industries.”

Meanwhile, talking about new age sectors, Gandhi said new sectors with a modern twist are emerging as a growing trend. To illustrate, there is a noticeable increase in capital expenditure not only in traditional industries like oil and gas but also in innovative areas such as green hydrogen.

Additionally, there are significant developments being announced in the electric vehicle industry and its associated ecosystem. We believe that the current growth in capital expenditure is a result of both a recovery in commodity markets and investments in these new-age sectors, he said.

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In addition to the slip in corporate investment, state government capital expenditure (capex) has also experienced a decline. Capex refers to the funds allocated by governments for the development and maintenance of infrastructure, public projects, and other essential sectors.

However, recent data indicates a downward trend in state government capex, signaling a reduced focus on infrastructural development and public welfare initiatives. This decline could have repercussions on the long-term growth prospects of various regions.

However, talking about corporate growth, Gupta said we are witnessing significant growth, exceeding 20 percent, in certain regions. However, what truly holds significance is the level of investment, whether it is from corporations or in total as a percentage of GDP.

This is crucial due to the maximum base effect observed in FY20 and FY21, which resulted in a decline in various indicators due to the impact of COVID. Additionally, there has been a build-up of demand within the system over the past few years, contributing to the improved growth we are currently experiencing.

Also Read | If cash squeeze worsens, risks to Indian economy increase

While state government capex has witnessed a decline, the overall government capex in the country has shown mixed results. In the fiscal year 2023, government capex has picked up, reaching 7.7 percent of GDP, compared to the pre-COVID level of 5 percent.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow