India Inc's capital expenditure slows despite jump in net profits

Investment in fixed assets up just 2.3% in FY22 despite 63.5% growth in earnings

The stellar rise in corporate earnings in financial year 2021-22 (FY21) and FY22 did not result in a corresponding boom in capital expenditure (capex), with listed companies’ investment in fixed assets rising just 2.3 per cent year-on-year (YoY) in FY22, growing at the slowest pace in the last six years.

In comparison, the firms’ combined net profit jumped 63.5 per cent YoY in FY22, while net sales increased 31.1 per cent — the fastest pace in over a decade.

The 955 non-financial companies in Business Standard’s sample reported combined net profit of Rs 7.18 trillion in FY22, compared with Rs 4.39 trillion