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MOSL: Morning India (4/October/17)-1. Capital Goods (New project announcements decline sharply)-2. Fuel or Engines (Economy)-3. Automobile (Sep-17 volumes)

​MOrning India (4/October/17): 1. Capital Goods (New project announcements decline sharply); 2. Fuel or Engines (Economy); 3. Automobile (Sep-17 volumes)

Today’s top research theme

Capital Goods: New project announcements decline sharply; Private sector investment proposals at 15-quarter low

• ​New project investment proposals in 2QFY18 dropped 64% YoY to INR845b, the lowest level since June’14 when the new Modi government came into power. Private sector investment proposals fell to a 15-quarter low of INR313b (-83% YoY), accounting for 37% of total new project proposals. At INR532b (-9% YoY), the share of government proposals was 63% – of this, state government share was 44%.
  
• In 2QFY18, project completions slumped 77% YoY to INR512b, much lower than average run-rate of INR1t and marking a three-year low. Slowing execution can be partly ascribed to renegotiation of contracts post GST implementation from July 2017.
  
• Value of stalled projects remains elevated at INR13.2t (13.3% of total projects under implementation), of which 40% (or INR5t) were due to lack of environmental clearances (14%), fuel (13%) and lack of funds (10.3%).
  

Piping hot news

Excise duty cut on petrol, diesel by Rs2/litre to counter inflation

• ​The central government on Tuesday cut excise duty on petrol and diesel by Rs2 a litre to tame rising inflation and to shield consumers from the surging price of auto fuels.