Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Capacity Utilisation at a 23-Quarter High
May 29, 2019

Over the last few years, the revival in capex in the economy has not happened along expected lines.

During these years, the capacity utilisation hovered around 65%-75% levels.

As per the latest RBI report, capacity utilisation in manufacturing rose to a 23-quarter high at 75.9% in the third quarter of FY19. The last time it was better was in the fourth quarter of FY13 when capacity utilisation reached 78%.

In fact, as per the FICCI survey in May, overall capacity utilisation rose to 80% in the fourth quarter of FY19.

Typically, when the capacity utilisation rises above of over 75%, it prompts companies to expand their capacities. If this gradual pick-up sustains, it could lead to a pick-up in private sector investment.Thus a revival in the investment cycle could be underway despite the current economic slowdown.

Not to mention, banks and corporates are making efforts to strengthen their balance sheets. This should provide a conducive environment for the revival of the capex cycle.

With this, we believe corporate banks are set to make a comeback!

Data Source: RBI

This Chart Of The Day was published in The 5 Minute WrapUp - Aakash Prakash Led Us to Our First Winner. Now Here's Another Great Stock from his Portfolio

Equitymaster requests your view! Post a comment on "Capacity Utilisation at a 23-Quarter High". Click here!


Our Most Popular Charts

Get the Indian Stock Market's
Most Profitable Ideas

How To Beat Sensex Guide 2020
Get our special report, How to Beat Sensex Nearly 3X Now!
We will never sell or rent your email id.
Please read our Terms