India: Investment recovery remains a FY20 story – Standard Chartered

India’s Capex data for Q1-FY19 (quarter ended June 2018) indicates that the marginal improvement in the previous quarter was temporary, notes the research team at Standard Chartered.

Key Quotes

“Trends reversed to a slowdown in the capex recovery, as observed in the last four years.”

“Total projects under implementation, new investment announcements, projects outstanding and project completions declined, erasing the gains in the March quarter.”

“Private investment slipped into negative territory again in Q1-FY19, after briefly turning positive in the previous quarter. It has been negative in 9 of the previous 10 quarters.”

“Capex data is likely to remain weak, picking up only in FY20 after the national and state elections scheduled for 2019. In addition, the twin balance-sheet issues and recapitalisation in the banking sector are underway and likely to be completed only by end-FY19 or early FY20.”