Page 22 - CII Artha Magazine

Domestic Trends

Completed Rs 1.47 lakh crore in the CHHATTISGARH AND in the electricity transmission Corporate was also mirrored in Q1FY24 higher PAT Margins during the
and railway transport
previous quarter and Rs 1.39
GDP print as these continued
said quarter. The PAT Margin
Investments lakh crore in the comparable TAMIL NADU EMERGED infrastructure services, while to benefit from government’s for the oil & gas sector
AS THE TOP STATES
quarter last year.
for Tamil Nadu it was in the
WITH HIGHEST VALUE road and shipping transport sustained push towards received a boost from lower
infrastructure spending. The
crude oil prices compared to
VALUE OF COMPLETED The data suggests that the OF COMPLETED infrastructure services. continued sluggishness in a year-ago period and no cut
PROJECTS IN Q2FY24
Maharashtra reported
decline in value of completed
PROJECTS SLUMP IN projects was driven by the completed projects in road external demand, however, in retail prices of petrol and
diesel. Also, earnings in the
impacted on the net sales of
Q2FY24 private sector, while the value transport infrastructure and Performance the Textile sector. refining segment are likely to
of completed projects by the A state-level analysis shows housing construction. Delhi, have benefitted from the
The value of completed government recorded a that Chhattisgarh, Tamil Nadu, on the other hand, reported Of the 15 sectors, availability of cheaper Russian
projects slumped on both double-digit growth as Maharashtra, Delhi and completed projects in the Pharmaceuticals, ITES, Power, crude oil in Q1 FY24.
sequential and annual basis compared to the previous Madhya Pradesh emerged as commercial complexes and Consumer Durables saw
standing at Rs 1.0 lakh crore quarter. the top five states with higher recreational services, while
in Q2FY24 as compared to number of completed for Madhya Pradesh it was in
projects in Q2FY24. the education and irrigation espite the unseasonal It is important to note that
sector. D textiles and oil & gas, posted a
Trend in Completed Projects by heavy rains, lagged the tepid topline performance Corporate
Ownership (Rs lakh crore) Most of the completed impact of monetary tightening is not indicative of weak positive annual growth in net
3.50 projects in Chhattisgarh were undertaken by RBI and weak domestic demand. Factors performance sales in Q1FY24. Sectors such
3.00 2.87 external demand, the such as sluggish demand from as Automotive, Capital goods,
2.50 corporate results in the first overseas markets and lower across sectors Real estate & Construction,
1.34 1.92 quarter of the current fiscal commodity prices may have Construction material,
2.00 1.81 have displayed signs of contributed to this. On the positive factors leading to constant at 9.0 per cent in Consumer Durables,
1.50 1.32 1.42 1.22 1.39 0.51 0.85 1.47 States with Higher Value of Completed resilience. other hand, a pause in higher profitability. Q1FY24 as compared to the While the easing of input cost Pharmaceuticals, Financial
Projects in Q2FY24 (Rs lakh crore)
1.00 0.72 0.48 0.55 0.42 0.91 1.00 interest rates, improvement in previous quarter and was a pressures supported margin Services and Transport
1.52 0.70 1.30 0.27 Additionally, the PAT Margin tad higher than the 6.2 per Logistics posted a
0.50 0.33 0.97 1.07 0.35 corporate earnings and expansion for most sectors in
0.84 0.87 0.73 Q1FY24 SEES A JUMP
0.39 0.52 0.56 0.31 robust macroeconomic for the same set of companies cent margin in the same Q1FY24, the slowdown in net double-digit growth in net
0.00 0.30 IN PROFITS, WHILE
Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 trends are some of the under analysis remained quarter last year. sales was more pronounced sales which is indicative of
Government Private sector Total investment 0.25 NET SALES GROWTH in the export-oriented easing supply chains and
Source: CMIE Capex database & CII Research 0.20 DECELERATE sectors as high domestic real growing economic activity.
0.15 0.13 Corporate Performance Snapshot rates and slowing global The growth in net sales in the
0.11 economy impacted demand. automotive sector in Q1FY24
organic chemicals and dyes & 0.10 0.09 70.0 12.0 was on the back of healthy
MANUFACTURING polymers. This was followed 0.05 0.06 The aggregate performance of demand, especially in the SUV
SECTOR SEE THE by the services (other than India’s corporates in Q1FY24 60.0 10.0 Our analysis shows that, segment as well as price hikes
HIGHEST VALUE OF financial) sector, in which 0.00 Chhattisgarh Tamil Nadu Maharashtra Delhi Madhya Pradesh pointed to a sharp uptick in 50.0 9.0 among the 15 major sectors implemented by automakers.
profits, despite a substantial
(including oil & gas and
COMPLETED most of the completed deceleration in sales growth. 40.0 8.0 financial services), all sectors The healthy performance of
PROJECTS IN Q2FY24 projects were related to air Source: CMIE Capex database & CII Research As per the CII analysis of 30.0 6.0 barring chemicals, power, construction related sectors
and road transport
infrastructure services. 1910 non-financial listed 20.0
Additionally, while new project A break-up of data showed companies from the CMIE 4.0
announcements are a good that private sector investment, On a sectoral basis, the The construction & real Prowess Database, net sales 10.0
barometer of business measured by the value of manufacturing sector estate sector also witnessed reported a contraction of 2.2 0.0 2.0
sentiments, the value of ongoing investments, increased witnessed the highest value of a relatively higher value of Outlook per cent in Q1FY24, the first -10.0 -2.2 0.0
ongoing investments is a to Rs 105.5 lakh crore in completed projects at Rs 0.44 completed projects at Rs in the last nine quarters.
better indicator for gauging Q2FY24, registering a lakh crore in the quarter, with 0.11 lakh crore in the said Going forward, investments further and Concurrently, net profits Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24
the investments happening on double-digit growth of 23.1 most of the projects related quarter. government’s continued the government can take jumped nearly 43 per cent as
to drugs & pharmaceutical,
ground as it nets out the value per cent on an annual basis, push for capital initiatives like expanding compared to the 13.8 per Net Sales (y-o-y%) PAT Margin (% , rhs)
of stalled projects from the but remained a tad lower than Top Sectors for Completed Projects expenditure, at both the the PLIs to some of the cent in the previous quarter Note: includes analysis of 1910 non-financial listed companies
outstanding projects. Latest Rs 105.7 lakh crore in the in Q2FY24 (Rs lakh crore) central and state levels, labour-intensive sectors and 7.5 per cent in the Source: CMIE Prowess Database and CII Research
data suggests that while the previous quarter. On the other will not only help such as footwear, toys, etc; corresponding quarter last
total value of ongoing hand, even though the value of Sectors Q1 FY24 Q2 FY24 crowd-in private come up with an year as lower input prices
investments moderated albeit ongoing investments made by Manufacturing 0.21 0.44 investment at a higher Employment Linked boosted margins. This trend is
marginally to Rs 243.3 lakh the government contracted level, but also stimulate Incentive Scheme (ELI) for in complete divergence from Further, higher profits also average rate of 4.43 per cent improved to 7.2 from 5.9 a
crore in Q2FY24 from Rs both on a sequential and -Metals & metal products 0.01 0.24 demand in other sectors select employment what was witnessed in the helped the companies sustain in the first quarter of the year ago, thereby reflecting
244.6 lakh crore in the annual basis to stand at Rs -Chemicals & chemical products 0.05 0.09 through its multiplier incentive sectors; address last fiscal, where the sales their debt servicing capability previous fiscal. The interest stronger financial health of
previous quarter, it was higher 137.8 lakh crore, its share in impact on growth. issues related to the Cost growth was impressive, but despite higher interest rates. coverage ratio, which is a the corporates. Robust
than Rs 225.5 lakh crore in the the total ongoing investments Services (other than financial) 0.51 0.39 of Doing Business, etc to profits were depressed due to During the first quarter, RBI ratio of the company’s balance sheets of the private
corresponding quarter last remained high at around 57 - Transport services 0.38 0.27 It is important to help revitalise private higher input costs in the kept its key policy repo rate earnings before interest and sector and banks, too, confirm
year, marking a growth of 7.9 per cent. invigorate private investment in the economy. aftermath of the war in unchanged at 6.5 per cent, taxes over its interest this trend.
per cent in year-on-year terms. Construction & real estate 0.13 0.11 Ukraine. which is much higher than the expense during the period,
Source: CMIE Capex database & CII Research

22 ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 23
QUARTERLY JOURNAL OF ECONOMICS
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