Manufacturing sector MSMEs to benefit from capacity additions

CRISIL has analysed the growth in fixed assets of 2,185 micro, small, and medium enterprises (MSMEs) in the manufacturing sector, rated on the basis of their financials for 2013-14 (financial year April 1 to March 31). The study shows that with an average growth in fixed assets of 24 per cent during 2013-14, these MSMEs are poised for growth in the next one to three years.

In the manufacturing sector, MSMEs in auto ancillary and components led with the highest growth in fixed assets of 29 per cent, followed by textiles at 26 per cent, and those in engineering and capital goods at 23 per cent. The fixed assets of MSMEs in electrical and electronics components grew at 17 per cent and of those in steel and allied products at 11 per cent.

This reflects the investment these MSMEs have made in capacity addition and modernisation, anticipating better prospects for growth in the next one to three years. CRISIL expects GDP growth of 7.9 per cent in 2015-16 and the above MSMEs will benefit from this growth.

Note: CRISIL has rated over 75,000 MSMEs in India. This fortnightly tracker presents to our readers insights on MSMEs, a key element of the Indian economy.