Representative End User Clients
Representative Automation Clients
Representative Software Clients
Executive Overview
A company incurs capital expenditure (CapEx) – the capital utilized to buy fixed assets or to add to the value of existing fixed assets – to acquire or upgrade physical assets on plant and machinery, land and buildings, property, and such others. ARC Advisory Group captures CapEx in this report in two separate segments: based on the money spent on acquiring and upgrading total fixed assets, and on the money spent on acquiring and upgrading the plant and machinery.
ARC recently published its CapEx report (ARC’s Capital Expenditure Report Index for Industries) focused on industries for all world regions including North America, EMEA, Asia, and Latin America. However, ARC’s India capital expenditure report focuses exclusively on India’s capital expenditure analysis and includes the CapEx trends for leading industries in the country, such as automotive, cement, chemical & petrochemical, electric power, metals, oil & gas and refining, and pharmaceutical.
Economic expansion, especially in a domestic consumer demand-driven economy, such as India, boosts the country’s industrial growth. However, the demand and investment dynamics of each industry vary. For example, India’s electric power industry attracts large investments because the demand for electric power exceeds the country’s generating capacity. Industries such as metals and cement also spend more in terms of percentage of their total revenue due to the escalating demand from the growing investment in infrastructure projects. According to ARC Advisory Group’s India CapEx Survey 2015, capital spending as a percentage of revenue is relatively high in the electric power and metals industries in India. On average, while the electric power industry spends 27 percent of its revenue on CapEx, metals industry spends 39 percent of its revenue on CapEx.
However, India is still a highly price-sensitive market and continues to remain a country in which capital funding is expensive. End users of industrial technology, systems, and software often make the buy decision based on negotiated prices after a protracted evaluation process, which forces suppliers to be more competitive. Additionally, end users are more concerned about their ability to make cost-effective upfront investment and this often results in delay of project implementation. However, India is growing at a better pace than many developed economies and as consumer demand is more domestic driven, a growth rate near 7 percent makes India a preferred destination for global investments.
Table of Contents
- Executive Overview
- CapEx Trend by Industry
- Automotive
- Cement
- Chemical and Petrochemical
- Electric Power
- Metals
- Oil & Gas and Refining
- Pharmaceutical
- Food & Beverage
- Recommendations
ARC Advisory Group clients can view the complete report at ARC Client Portal on Office 365 or Box.com
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Keywords: Capital Expenditure (CapEx), India, Fixed Assets, Plant and Machinery, Industrial Growth, ARC Advisory Group