Industry investing in capacity, back-end infra despite 2nd wave

NEW DELHI: Several industry captains have shown confidence in the economy’s recovery prospects and said the capex cycle is reviving and companies are investing to augment their capacity as well as back-end infrastructure.

The business leaders, including Sunil Kant Munjal, Harsh Pati Singhania and Sanjay Kirloskar, participating in an AIMA event here, unanimously said the industry is better prepared for the second wave of COVID-19 than it was at the onset of the pandemic last year.

Hero Enterprise Chairman Sunil Kant Munjal said there is a tremendous opportunity to invest, both for the financial investors and industrial companies, according to a statement by the All India Management Association (AIMA).

“The Capex cycle, which was slow for 12-14 quarters, is reviving and companies are making serious Capex commitments for the next few quarters,” he said.

According to Munjal, the domestic investors are getting more adventurous during the crisis while money is flowing in from overseas in search of returns. “There is a belief that this is a start of a long-term investment cycle that will go on for a decade or more,” he said.

JK Paper Vice Chairman and Managing Director Harsh Pati Singhania said where capacity utilisation is nearly full, there it is time to invest.

However, he added that many sectors and companies are still in difficulty and will not invest. A lot of investment will go not into producing more of the same but into digitalisation and enabling better customer experience, said Singhania, who is also president of AIMA.

Kirloskar Brothers Chairman and Managing Director Sanjay Kirloskar said the business models are changing and his companies’ investments have been targeted more at the back-end than at capacity.