Non-public capital expenditure in India continued to stay weak within the fourth quarter of the monetary yr 2024-25 (Q4FY25), based on a latest report by Avendus Spark.
Regardless of an total rise in new undertaking bulletins, the non-public sector’s contribution remained subdued as a result of a number of financial and geopolitical elements.
The report highlighted that complete new undertaking bulletins throughout each private and non-private sectors elevated by round 22.7 per cent year-on-year (yoy) to Rs. 18 trillion in Q4FY25. Nonetheless, inside this, non-public sector undertaking bulletins noticed solely a marginal 4 per cent yoy rise.
It mentioned, “Non-public capex stays sluggish in Q4FY25….New undertaking bulletins, encompassing each private and non-private sectors, surged approx. 22.7 per cent to Rs. 18tn in Q4FY25.
In FY25, non-public undertaking bulletins contracted 9 per cent yoy to Rs. 27tn led by a pointy decline in Providers and Development/RE. Weak home shopper demand, coupled with rising world macro uncertainty, has led to a notable decline in non-public capex bulletins.”
The Electrical energy and Renewable Power sector within the non-public bulletins confirmed a development of 55 per cent, however, key sectors resembling Manufacturing and Providers noticed a decline in new undertaking bulletins.
Manufacturing undertaking bulletins fell by 5 per cent yoy, whereas the Providers sector noticed a sharper drop of 18 per cent yoy.
Inside Manufacturing, nonetheless, some segments like Textiles, Meals & Agro, Miscellaneous Manufacturing, Metals, and Transport Tools reported vital development.
For the complete monetary yr FY25, non-public undertaking bulletins fell by 9 per cent yoy to Rs. 27 trillion. This decline was primarily as a result of weaker exercise within the Providers and Development/Actual Property sectors.
The report attributed this pattern to sluggish home shopper demand and rising world macroeconomic uncertainty.
Moreover, lingering considerations over Trump-era tariffs and fears of a surge in imports from China have disrupted world commerce and affected investor sentiment. These elements have made non-public corporations cautious, resulting in delays or downsizing of capex plans.
Non-public undertaking completions additionally declined sharply in Q4FY25. The worth of accomplished non-public tasks fell 41 per cent yoy to Rs. 965 billion. Sector-wise, Manufacturing dropped by 30 per cent, Providers by 70 per cent, and Development and Actual Property by 89 per cent.
For the whole FY25, non-public undertaking completions had been down 31 per cent yoy to Rs. 2.5 trillion from Rs. 3.6 trillion in FY24.
Nonetheless, some brilliant spots remained. Electrical energy sector investments surged 55 per cent yoy to Rs. 5.6 trillion in Q4FY25, whereas Mining noticed an distinctive rise of 732 per cent yoy to Rs. 25 billion from simply Rs. 3 billion a yr in the past.
General, the report confirmed that whereas some sectors are displaying resilience, non-public capital expenditure in India continues to face vital headwinds.