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How have some of India's bigger industrial or manufacturing sectors been doing? Are there signs of a recovery? As Table 1 shows, demand growth has been slowing for years. But, as Table 2 shows, net profit margins have remained reasonable in several sectors, such as fast-moving consumer goods. Even in mining, which has seen many constraints of late, margins have been decent.
Which sectors are sitting on useless capital? As Table 3 shows, FMCG is using capital most efficiently. Construction and infrastructure, meanwhile, have seen a solid decline in return on capital over the past years. Mining exports have been hit by domestic constraints; but many other sectors have seen an increase in the percentage of revenue classified as being from exports. This is revealed in Table 4. Sadly, textiles have not seen an export bulge, perhaps showing the rupee has not depreciated enough. Textiles are also, according to Table 5, more import-intensive than several other sectors, suggesting that rupee depreciation might hit it on the cost side.
Table 6 shows that sectoral indices have diverged over the past few years, as defensive sectors like FMCG have done well. But in almost all sectors, a recent uptick in investor sentiment is visible, at least as reflected in the stock price indices.
