From consumer goods to textile sectors: The great polarisation in India Inc

There is a clear divide between firms with record valuations but few assets, and those with substantial assets but low market capitalisation

No conversation on the Indian economy or earnings growth is complete without a complaint about the lack of investment by the corporate sector. Corporate spending on plant and equipment was up just 6.7 per cent in FY18, in line with the past four years’ compounded annual growth rate (CAGR) of seven per cent. In comparison, capital expenditure (capex) had grown at an annualised 16 per cent between FY10 and FY14. 

If two of India’s biggest non-financial firms — Reliance Industries and Tata Motors — are excluded from the sample, the numbers look worse. Excluding the two, capex was up just