Buoyant on a rising economy and demand that is aided by various government initiatives, infrastructure and allied firms are hiking their capital expenditure (capex) for FY25. The current fiscal is expected to be a capex intensive year as firms embark on capacity addition and expansion through both organic and inorganic routes.
For instance, JSW Steel has earmarked a capex of Rs 20,000 crore for FY25, as it expects the fiscal to be good with economic momentum and steel demand continuing to be strong. The company had a capex spend of Rs 17,000 crore last year.
“This includes expenses earmarked for Dolvi phase-III expansion and phase-II of Bhushan Power & Steel. We have strong cash in our books of Rs 10,500 crore. It would also be used for completion of JSW Vijayanagar Metallics, slurry pipelines and the pellet plant in Odisha,” joint MD & CEO Jayant Acharya said.
Tata Steel’s capex guidance for FY25 is Rs 17,000 crore.
“Out of the Rs 17,000 crore, about 75% will be in India — mainly for the Kalinganagar project — some for realigning blast furnaces, expanding raw materials division and regular sustenance expenses. Some part of it will be spent on the electric arc furnace (EAF) project in Ludhiana, and the balance will be for Europe. A little over Rs 12,000 crore would be spent in India,” Tata Steel CEO & MD T V Narendran said.
The Mumbai-headquartered firm’s capex guidance for FY24 was at Rs 16,000 crore, while the actual spent rose to Rs 18,207 crore.
UltraTech Cement has earmarked Rs 9,500 crore (Rs 9,187 crore in FY24) as capex for FY25, including for capacity expansion plans and cater to rising domestic demand. The Aditya Birla Group’s capex for next three years would be about Rs 32,400 crore, which would be used for production capacity expansion and completing Kesoram Cement acquisition.
Larsen & Toubro (L&T) has earmarked a capex of Rs 3,500-4,000 crore (Rs 3,500 crore) to upgrade equipment, manufacturing of electrolysers and building of data centres among others.
“This is the same ballpark that we have been doing every year,” L&T president and CFO R Shankar Raman said.
Jindal Stainless (JSL) has earmarked a capex of Rs 4,700 crore for FY25, a majority of which would be used for its proposed expansion plans. The rise in capex, from Rs 3,800 crore in FY24, is also on back of expectations of a rise in domestic demand, said MD Abhyuday Jindal.
JSL intends to fund about 90% of the capex, including a spillover of Rs 800 crore from FY24, via internal accruals. The capex would be used for expansion of brownfield activities, completion of 54% stake in Chromeni Steels in Mundra and setting up of a 1.2 million tonne per annum (MTPA) stainless steel melt shop in Indonesia, Jindal said.