economy

Infra investment activity loses steam in Oct-Nov

Infra investment activity loses steam in Oct-Nov

NEW DELHI : India’s infrastructure investment activity weakened during the first two months of the fiscal third quarter, with order inflows falling 20-30% largely because of large order inflows for high-speed rail projects in the year-ago period, brokerage Emkay Global Financial said. Though the ordering activity remained good in the first six months of the current fiscal, rising almost 20% from a year earlier, smaller orders in the railways and metro segments resulted in a drop in the overall order book, Emkay said in a note to clients on Monday. Order inflows in the infrastructure sector grew 9% till date largely buoyed by activity in the roads segment. Excluding roads, inflows would have declined 7%, the report said. The growth in tendering improved despite the value of orders dropping in the past two months. Year-to-date growth quickened to 17% from 5% in the first six months of the fiscal year, aided by a few large tenders. Excluding these large long-term tenders, year-to-date growth stood at 11%. Among sectors, roads (31%), water (13%), railways (8%) and irrigation (6%) together constitute 58% of the overall tenders. Emkay said orders in the trailing 12 months to November stood at Rs8.5 trillion, the highest ever (an increase of 25% from a year earlier). Some of the big tenders included projects for Bharat Broadband, an advanced chemistry cell, and a film city in Uttar Pradesh. According to Emkay, the order books of 35 companies across capital goods, infrastructure and defence industries were 5% higher at the end of 30 September from pre-covid levels of 30 September 2020. Among sectors, infrastructure (mainly road companies) saw the highest growth in the order book, with a 9.5% annual growth over two years at the end of September. The report said that state governments’ spending (top 15 states) stood at ₹1.66 trillion (7% 2-year CAGR) during April-October (meeting 36% of the annual budget against 30% last year). Uttar Pradesh and Madhya Pradesh, with capex of Rs29,000 crore and Rs21,000 crore, respectively, remained the states with the highest spending on infrastructure. Download.

economy 2021-12-14 Livemint