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Corporate India: Initial signs of excess capacity build-up across sectors

Money ControlMoney Control · 6m
Corporate India: Initial signs of excess capacity build-up across sectors

Investors should stay vigilant as the industry may face a downturn with lower utilization of existing capacity. Quarterly performance has been driven by improved realizations, and there are medium-term triggers such as China plus and protectionist measures for the tyre industry. However, valuations are not cheap, but the medium-term outlook has improved. Domestic manufacturing capacity in the RAC sector has increased substantially in the past two years, and there are new players entering the market in the renewables sector. Cement prices have also seen a correction due to intense competition. However, any adverse macro event could impact demand-supply dynamics. The government's capex push and supportive policies have been driving economic growth in the country.

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