Mumbai: India’s capital expenditure in India has increased significantly and is expected to continue to grow in the coming months, according to a new report by global brokerage firm Jefferies.
Mahesh Nandurkar, head of research and managing director at Jefferies, expects capital expenditure growth to remain strong in February and March.
This coincides with the government’s revised budget estimates, demonstrating the continued boost of infrastructure and industrial development.
“These are on the line of expectations, but the facts are happening, full of confidence,” Nandurkar said.
He added that next year’s figures (about 10% or so) would be “I think it’s likely to be”.
“It depends largely on whether the government will receive capital expenditures in advance and whether it continues,” Nandurkar said.
In January 2025, the central government’s capital expenditure increased by 51% year-on-year, reflecting its commitment to strengthening the country’s infrastructure.
Government focus on railway and road projects has contributed to significant progress, with approximately 83-87% of revised estimates already completing estimates for these sectors in the fiscal year 2025.
Nandurkar said more calibration methods need to be taken. The market is cautious about private capital expenditures.
He added: “I believe private capital expenditures are already happening in areas such as cement, steel, hospitals and real estate.”
The government’s commitment to capital expenditure remains large, increasing it to states about 60%.
This fiscal support is expected to further accelerate infrastructure projects at the state level, thereby promoting overall economic growth.
Jefferies also highlighted the strong growth potential of key sectors. One of them is metal reserves, highlighting the strong momentum of the industry.
The broker also noted that Asian Steel’s expansion is still 20% below its long-term average, leaving room for potential expansion.
In addition, Indian steel prices rose 5% from December lows, indicating a recovery in the industry.
Jefferies further noted that any potential steel obligations could provide more support for prices, increase profit margins and increase the valuation of metal companies.
The brokerage said the metals industry is expected to continue its outstanding performance in the coming months as fundamentals improve and favorable market conditions.
