Mukherjea believes the direct-to-consumer industry in India is causing erosion of moats in the FMCG market, making it a difficult industry to invest in. Among the cyclical sectors, banks and financial services are expected to have a sound outlook. Global commodities such as metals, on the other hand, are seeing a weak outlook in the near term on the back of expectations of a weak demand environment led by worries about increased prices, and higher interest rates, said analysts. Experts cautioned that the AMFI size classification is based on market capitalization and thus does not really indicate right investment opportunities. However, economic growth is picking up and some of the cyclical and capital-intensive sectors are well placed, though investors need to pick wisely.

In March 2011, when the investment cycle was at its peak, OBICUS reported a capacity utilisation level of 83 per cent. “When viewed in conjunction with slowing employment, it is certainly a problem. And the main reason is that the labour-intensive industries are not growing fast enough,” said Pronab Sen, principal advisor, Planning Commission. “More research is required to understand why the traditional labour-intensive industries are also preferring capital.” An increasing bias towards capital-intensive production, or a higher degree of mechanization, has also skewed India’s export basket. Some sectors led the way and were more attractive to investors than others – these are utilities, especially the energy sector (57%), followed by the financial services and healthcare sectors which stood neck and neck at 49% and 48%, respectively.

This kind of farming is practised by a large number of farmers in the country. Based on past trends, India needs approximately $400 billion of foreign capital cumulatively over the next six years. How they differentiate themselves from their competitors by improving the customer experience through technology and their new Experience Center for clients. “We use a couple of different technology pieces a lot on the custom software side to help process improvement, and also to digitize a stale workflow process from a documentation standpoint,” Jordan explains in our episode.

Stock Analysis

Upon completion these alone could raise the steel capacity by almost 50 per cent. The government is likely to hold discussions with Vedanta informally on a possible stock market listing of Balco before a firm proposal is made to the aluminium company’s board, said people aware of the development. If the worker-to-fixed-capital ratio is baised towards capital, it reflects greater preference for capital goods in the production process. In recent years, the proportion of investments leading to capital formation has been low, and India needs proactive investment in greenfield projects to become a $5 trillion economy by 2027. Upgrades from mid to large-cap category and from small to mid-cap category are primarily from industrials, real estate, financial services, banks, and auto. How do you stay competitive and differentiate yourself in an industry where many cosmetics manufacturers have been around for years?

Nearly 30 per cent of the total installed capacity is from renewable energy sources. Low PLF levels and high competition from renewables implies that investments into conventional power generation will remain sluggish for a long time. Experts believe the shift towards capital-intensive production can be explained by restrictive labour laws, which result in an increase in contract labour, poor availability of skilled labour and greater competition from better quality foreign goods. “(It’s) a matter of concern because it is this (labour-intensive manufacturing) sector that holds the potential to absorb the large pools of surplus labour from India’s agriculture sector,” Veeramani said. A fall in labour intensity in manufacturing — the extent of labour inputs used in per unit of output produced — also raises concerns about India’s ability to absorb its rapidly expanding workforce and reap the benefits of a favorable demography. We have identified seven such industries- electronic goods, pharmaceuticals, textile and apparel, food processing, automotive and auto parts, chemicals and APIs, and capital goods.

At the same time, the appeal also reveals the somewhat desperate situation on the investments front. Umpteen green-shoots have been cited in the past but none could mushroom into the coveted animal spirits-driven investments frenzy. The central government has raised its capital spending at over 20 per cent for three years in succession and has hoped that these would “crowd-in” the private sector, but the private sector remains unimpressed.

In theory, the balance sheet provides an honest look at a company’s assets and liabilities, enabling investors to make a determination regarding the firm’s health and compare results against the firm’s competitors. Because assets are better than liabilities, companies want to have more assets and fewer liabilities on their balance sheets. Low capacity utilisation is one of the reasons for the poor interest of the private sector. Capacities already created are still under-utilised and therefore the economic reason to create additional capacities is limited. Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more.

Every industry will be tech driven – can India ride this next wave

This is known as premium ceded to reinsurers and thus net income is taken into the books after adjustment of unearned premium. The premium income received from policyholders during current financial year is not the real income to arrive at profit or loss. This is because some policies issued during the current year may yet to run till next year and so some adjustment is to be made to keep provision for policyholders to the extent of premium that is yet to expire. India’s benchmark indices dropped 1% on Friday, wiping out the previous day’s gains, as lenders — led by HDFC group stocks — led the selloff. Continued worries about the health of the US regional banks, which dragged Wall Street down on Thursday night, also contributed to declines. “The ASI data on workers employed is underestimated because it doesn’t capture the huge rise in contract labour. Rigid labour laws have forced employers to seek out workers on contract,” said Ajit Ranade, chief economist at Aditya Birla Group.

It was a matter of “working with [R&D’s] software engineers and our IT groups to use APIs so that our MRP system and our inventory systems and everything like that can all sync together.” They would need to find a solution to this to scale successfully. Here’s what leaders and experts have said about Budget 2023 provisions for the sector. Right from global runaway inflation, elevated interest rate environments, Russia-Ukraine geopolitical crisis, and consequently fractured trade ecosystems tested investor resilience to great extent. If India is to reach its goal of becoming a developed nation by 2047, the country’s smallest businesses will need to participate in the nation’s digital ecosystem. Due to the nature of its political system, it can accelerate growth pedals faster than other countries and thus a lot of foreign liquidity could be moving to China from other Asian countries like India.

Although several labor-intensive tasks and jobs need low levels of education or skill, however, the same doesn’t apply to every position. With the advancement in technology and the need to show productivity, there are numerous industries that have gone beyond the status of labor-intensive. However, there are some that still remain in the race, such as mining, agriculture, hotel, restaurants, etc.

Please consider your specific capital intensive industries requirements before choosing a fund, or designing a portfolio that suits your needs. In the case of ahigh level of inflation in the economy, the labor-intensive industry can suffer to some extent. Conventional power generation now competes with renewable energy sources that have seen substantial investments in recent times.

• India’s benchmark indices dropped 1% on Friday, wiping out the previous day’s gains, as lenders — led by HDFC group stocks — led the selloff.
• They don’t feel the pressure to build capacities in preparation for a boom in demand.
• “When viewed in conjunction with slowing employment, it is certainly a problem. And the main reason is that the labour-intensive industries are not growing fast enough,” said Pronab Sen, principal advisor, Planning Commission.
• We minimise risk through in-depth research and diligence, which is ingrained in our DNA.
• However, according to executives close to the developments, Reliance is not keen on pursuing the potential offer, given the steep valuations.

Chadha remains constructive on top private banks and selected public sector undertakings. A ‘Labour Intensive’ product requires a larger amount of human labor to bring it off. Labour Intensive goods and services would include food service, hospitality, public education, agriculture (to some extent…but not as it used to be 50 years ago).

On the basis of this standard, iron and steel industry can be termed as a capital intensive industry. Founder of Marcellus Investment Managers, Saurabh Mukherjea, advises investors to identify businesses with unique skill sets and distinctive capabilities, and ones where the promoter is an honest person. He suggests investing in financial services platforms such as Prudent Corporate, as well as companies with high revenue growth, such as Divi’s Labs and Dr Lal PathLabs, which have distinctive capabilities in their respective sectors.

Ahead of Market: 10 things that will decide D-Street action on Tuesday

The stability of industry-level wage rates brings industrial reforms under the scanner for their implications on worker welfare. Wage convergence could be inhibited by the inter-industry movement of workers. Surveys by the Reserve Bank of India throw some interesting light on the possible desired levels of capacity utilisation required to spur investments. According to the RBI’s OBICUS, capacity utilisation through all of 2022 was well over 70 per cent.

The report further adds that the structural growth in the digital economy – a change in commerce from the usual brick and mortar model to an internet-driven one – to act as the driver of “spectacular binary outcomes” over the longer term. And then, there are several such posts in the personal care and hospitality industries that are labor-intensive and require frequent human intervention to achieve maximum results. On the other hand, the construction industry is another labor-intensive one that needs more hands-on job. Despite the availability of tools and equipment, there must be a person involved with an extensive Range of tasks.

CMIE’s CapEx database informs that there is no dearth of investment projects on hand. In steel, there are 347 projects that aim to set up 239 million tonnes of additional capacity. Of these 39 projects involving nearly 71.3 million tonnes of capacity are overdue for completion but the promoters seem to be in no hurry to commission the projects.

A labor-intensive industry requires large amounts of manual labor to produce its goods or services. Labour intensive technology of production refers to the technique in which more labour per unit of output is used. On the other hand capital-intensive technology uses more capital per unit of output. • Commercial agriculture- It is a type of farming that uses modern techniques for yielding greater productivity. It involves the use of high yielding seeds, use of chemical fertilisers, insecticides and pesticides to obtain higher yield. Commercial farming is capital intensive as it involves huge capital investment and large lands.

A large number of the upgrades in the Association of Mutual Funds in India size classification are expected

Marathon canceled the release of fourth-quarter results Tuesday after saying there had been “accounting errors” in several quarters of its financial statements. The US Securities and Exchange Commission raised questions about how the miner recognized the impairment of digital assets and revenue. We view risk as a permanent loss of capital and, hence, believe in investing only within our circle of competence and in companies with the highest standards of corporate governance. We minimise risk through in-depth research and diligence, which is ingrained in our DNA. “Its fate is therefore not only decisive for Switzerland, for our companies, for private clients, for its own employees, but also for the stability of the entire financial system,” Swiss President Alain Berset said in unveiling the deal. With the government’s blessing, Nayshtetik and his team of engineers moved to neighboring Poland where they raised initial funding from a Polish company, Air Res Aviation, to develop a new drone for the Ukrainian military.

All efforts have been made to ensure the information provided here is accurate. Labor intensity has been declining since the onset of the Industrial Revolution in the late 1700s, while its inverse, capital intensity, has increased nearly exponentially since the latter half of the 20th century. This adjusted figure in claims is called ‘incurred claims’ for the accounting purpose. Companies see a free ride to growth for some time when demand picks up further.

Term & Policy

We also found that the government’s several reforms and initiatives for ease of doing business weren’t widely known amongst global business leaders and investors, which may have led to India not meeting its full FDI potential. But how do you go from an idea to competing against some of the biggest companies in the world in a low-margin, capital-intensive industry? These new funds have emerged as the cryptocurrency industry faces more intense scrutiny after the high-profile bankruptcy of crypto exchange FTX in November and the collapse of several other market players such as lender Celsius Network. The trial rules, published by the China Securities Regulatory Commission and effective from March 31, are designed to guide companies wanting to access liquid capital markets. Reliance Communications is being sold by FIIs, and there are new challenges around the ARPU as far as the telecom business is concerned. Ltd. makes no warranties or representations, express or implied, on products offered through the platform.

Moreover, to meet the immediate liquidity requirement the bank sold those long-dated securities at a loss of USD 1.8 billion. When depositors learned about it they queued up to withdraw the money at the earliest leading to further crisis.

• Our inventory is about 120 days of sales and receivables is about 75 and payables about 50, that is the working capital cycle.
• He cites a good order inflow and favourable margin management making the sector attractive.
• Banking and financial services stocks, however, are expected to fare well, as indicated by their fourth quarter performance.
• This paper notes persistent regularity in industry-level wage rates confirming the absence of a convergence behaviour.

This is a fairly representative sample that yields financial statements of about 25,000 companies per year. Capital intensive industry refers to an industry that requires a substantial amount of capital for the production of goods. In capital intensive industries, the proportion of capital involved is much higher than the ratio of labor. This is because the industrial structure and industry type require high value investments in capital assets. Capital Intensive Industry refers to that industry which requires substantial amount of capital for the production of goods. In the Capital Intensive Industries, proportion of capital involved is much higher than the proportion of labor.

“The AMFI size classification list is purely based on market capitalisation cut-offs and tends to change every six months. We are more focused on earnings, cash flows and the management team of businesses. We don’t put too much emphasis on market cap,” said Chandraprakash Padiyar, senior fund manager, Tata Mutual Fund.

In India, firms employing more than 100 workers require government permission for layoffs, retrenchments or closures, preventing companies from shuttering unprofitable ventures. These sectors have the potential to grow in size as well as cater to the export markets. India, according to our research, can target an additional $1 trillion of merchandise exports in the next five years by attracting higher FDI into these sectors through concerted efforts.