Fall in projects getting stalled or abandoned

by Mahesh Vyas

Only 24 projects that were under some stage of implementation were stalled before completion during the quarter ended March 2017. This is the lowest stalling of projects under implementation in any quarter since December 2008.

The total value of projects stalled also fell to a similar low of Rs.257 billion.

The largest project to be stalled during the quarter was the Rs.97 billion Jiribam-Tupul-Imphal railway line in Manipur. This was because of the economic blockade imposed by the United Naga Council.

De-allocation of coal from the Mandakini block to Tata Power for its proposed Odisha power plant has led to the company not submitting any proposal to the state government, yet. The block was de-allocated following a Supreme Court ruling that scrapped licenses for 200 blocks. The Tatas had proposed to set up a Rs.75 billion 1,320 mw thermal power plant at Begunia in the state. It had even acquired 871 acres of land for the purpose.

Other major projects that got stalled during the quarter include the Rs.28 billin Pune Municipal Corporation’s water supply project, the Rs.20 billion cement plant by JK Cement at Chittaurgarh and the Rs.12 billion man-made fibres project by Lenzing Modi Fibres in Panvel.

The sharp fall in projects’ implementation getting stalled is a pleasant surprise. The expectation was that demonetisation’s adverse impact on demand would lead a sharp slowdown in the announcement of new projects and also a rise in projects getting stalled. But, this has clearly not happened.

The March 2017 quarter CapEx aggregates results also show a substantial fall in projects getting abandoned, shelved or stalled.

The fall in projects getting abandoned is the most remarkable. Projects worth only Rs.44 billion were abandoned during the March 2017 quarter. This is the lowest abandoning of projects in the last eight years. Further, the value of projects abandoned during the quarter is just a tenth of the average (over eight years) value of projects abandoned during a quarter.

Projects abandoned during the March 2017 quarter includes the Rs.22 billion Basaveshwara Circle Hebbal Junction Steel Flyover in Bengaluru. There is also an unusual concentration of projects in Bangalore abandoned in the March 2017 quarter. Seven of the 18 projects abandoned during the quarter were in Bangalore and Bangalore Rural district.

In the past year or so, there has been small spikes in projects getting shelved. By and large, during the Modi government period, projects getting shelved has remained under Rs.100 billion, in a quarter. There were two exceptions in the 10 quarters since the July-September 2014 quarter. These were in the quarters ended June 2016 and December 2016, when projects shelved increased to over Rs.300 billion. In the March 2017 quarter, the value of projects shelved was 132 billion. While this is much lower than the spikes of over Rs.300 billion, it is still higher than the less-than-a-100 billion rupee mark.

Projects “announced-and-stalled”, ie those that were announced and soon thereafter stalled have also been few in recent quarters. During the March 2017 quarter these involved investments worth Rs.142 billion.

CMIE STATISTICS
Unemployment Rate
Per cent
3.5 +0.1
Consumer Sentiments Index
Base September-December 2015
96.5 -0.2
Consumer Expectations Index
Base September-December 2015
96.2 0.0
Current Economic Conditions Index
Base September-December 2015
96.8 -0.5
Quarterly CapeEx Aggregates
(Rs.trillion) Jun 16 Sep 16 Dec 16 Mar 17
New projects 1.46 2.37 1.42 2.92
Completed projects 0.91 2.21 0.91 1.77
Stalled projects 1.40 0.64 1.01 0.35
Revived projects 0.40 0.51 0.17 0.62
Implementation stalled projects 0.50 0.37 0.80 0.27
Updated on: 28 Jun 2017 8:20PM
Quarterly Financials of Listed Companies
(% change) Jun 16 Sep 16 Dec 16 Mar 17
All listed Companies
 Income -0.9 2.1 6.2 10.2
 Expenses -0.3 1.9 6.4 11.7
 Net profit -4.0 14.6 38.9 17.8
 PAT margin (%) 6.9 6.9 6.1 6.2
 Count of Cos. 4,519 4,489 4,485 4,305
Non-financial Companies
 Income -2.5 0.6 6.0 11.7
 Expenses -2.9 -0.2 7.4 15.4
 Net profit 9.7 26.7 23.4 -1.5
 PAT margin (%) 7.4 6.9 6.3 6.4
 Net fixed assets -9.2 7.7
 Current assets 8.1 2.4
 Current liabilities 11.6 9.4
 Borrowings 3.1 5.5
 Reserves & surplus 8.4 7.7
 Count of Cos. 3,515 3,491 3,491 3,359
Numbers are net of P&E
Updated on: 28 Jun 2017 8:30PM
Annual Financials of All Companies
(% change) FY13 FY14 FY15 FY16
All Companies
 Income 12.5 9.9 5.0 1.0
 Expenses 12.8 9.8 5.0 1.1
 Net profit 1.1 -2.1 2.0 -11.6
 PAT margin (%) 3.6 3.2 3.3 3.2
 Assets 14.3 12.2 9.3 8.1
 Net worth 9.6 9.5 8.6 7.4
 RONW (%) 6.8 6.2 6.2 5.6
 Count of Cos. 24,675 22,117 21,242 17,323
Non-financial Companies
 Income 11.8 9.6 4.1 0.0
 Expenses 12.2 9.2 4.2 -0.8
 Net profit -8.5 -2.4 -5.0 12.5
 PAT margin (%) 2.4 2.2 2.2 2.9
 Net fixed assets 12.9 11.6 13.0 12.4
 Net worth 7.8 8.6 7.3 6.7
 RONW (%) 5.5 5.1 4.9 5.9
 Debt / Equity (times) 1.1 1.1 1.1 1.0
 Interest cover (times) 2.1 1.9 1.9 2.1
 Net working capital cycle (days) 72 69 66 66
 Count of Cos. 19,170 17,554 16,934 14,134
Numbers are net of P&E
Updated on: 08 Jun 2017 2:48PM

New address type added, Promoters' shareholding pledge reports added