The graph below shows the total #capex of all listed companies. This includes
🔸Investment in Property, Plant and Equipment (PPE)
🔸Investment in group companies
🔸Acquisitions
🔸Investment in Property, Plant and Equipment (PPE)
🔸Investment in group companies
🔸Acquisitions
However, this is still less than the central government's #capex, which stood at INR 9.5 trillion (28% YoY). It is budgeted to be INR 11.1 trillion in FY25.
Historically, the ratio of listed corporate to central government #capex was as high as 5x in FY09. The gap has been reduced significantly.
State government #capex grew by 24% YoY to INR 7.4 trillion in FY2024 but fell short of the budgeted INR 8.4 trillion
The increase in corporate #capex was driven primarily by traditional sectors such as energy, metals, utilities, telecom, auto, and industrials.
Why does it matter to you?
🔸India's current Gross Fixed Capital Formation (#GFCF) at ~USD 1trn currently, and investment rate of ~34% are comparable to China’s levels from two decades ago from which point China skyrocketed.
🔸We could be NEXT!
🔸Simply put, GFCF measures how much money is spent on buying new or used long-term assets like buildings, machinery, and equipment by businesses, governments, and households (except small, unregistered family businesses). It's used to understand how much is being invested in things that help produce goods and services in the future.
🔸India's current Gross Fixed Capital Formation (#GFCF) at ~USD 1trn currently, and investment rate of ~34% are comparable to China’s levels from two decades ago from which point China skyrocketed.
🔸We could be NEXT!
🔸Simply put, GFCF measures how much money is spent on buying new or used long-term assets like buildings, machinery, and equipment by businesses, governments, and households (except small, unregistered family businesses). It's used to understand how much is being invested in things that help produce goods and services in the future.
Bonus Tweet: Top picks from a capex up-cycle perspective
🔸Capex execution and capex related stocks: L&T, #BHEL, #JindalStainless, #JSPL, #JSWSteel, #DLF, #Ambuja, #ACC, #Greenply, #Kajaria, Cera Sanitaryware, MGL, #Tata Power, #NTPC, #ONGC, #GAIL, #HPCL, Solar Inds.
🔸Lenders: #HDFC Bank, #SBI, #Axis Bank, PNB Housing Finance.
🔸Capex execution and capex related stocks: L&T, #BHEL, #JindalStainless, #JSPL, #JSWSteel, #DLF, #Ambuja, #ACC, #Greenply, #Kajaria, Cera Sanitaryware, MGL, #Tata Power, #NTPC, #ONGC, #GAIL, #HPCL, Solar Inds.
🔸Lenders: #HDFC Bank, #SBI, #Axis Bank, PNB Housing Finance.
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