Why the industry is set for a disruption
ECONOMY & POLICY

Why the industry is set for a disruption

Despite the devastation the pandemic has caused, the corporate results coming in belie any financial disaster. Of the Q4 results (January-March 2021) of 1,800 companies analysed, revenues from operations rose by 17 per cent over the previous year, profits after tax (PAT) grew by a tremendous 523 ...

Despite the devastation the pandemic has caused, the corporate results coming in belie any financial disaster. Of the Q4 results (January-March 2021) of 1,800 companies analysed, revenues from operations rose by 17 per cent over the previous year, profits after tax (PAT) grew by a tremendous 523 per cent and operating profits grew by 64 per cent. If we exclude banking, finance and oil, operational revenues have risen by 22 per cent and PAT by 180 per cent.GST collections, which touched Rs 1.23 trillion in March, jumped to Rs 1.41 trillion in April and have clocked Rs 1.02 trillion in May 2021, indicating a healthy trend so far. Advance collection of corporation tax and personal income tax in Q4 grew 146 per cent over last year, while overall net direct taxes doubled during this period compared to 2020. According to ICRA Ratings, the jump in direct tax collection in Q1 FY22 relative to Q1 FY21 reflected “healthy exports and a continuation of various industrial and construction activities, given the lower stringency of the staggered regional lockdowns in 2021 versus the nationwide lockdown in 2020”.Exports have done extremely well with $ 156 billion from January to May 2021 being the highest ever figure ever during this period previously. Trade between China and India grew to over $ 48 billion between January and May 2021. Exports to China surged by 90.2 per cent. China had overtaken the US to become India’s largest trading partner in 2020, with total India-China trade in the financial year worth $ 86.4 billion.These figures show that corporate India is not as fragile as it seemed when the country imposed a national lockdown in Q1 FY 2020-21. Having said that, business sentiment hangs on a thread. Any major calamity can be the last straw that breaks the camel’s back. Areas that seem to be attracting investments are definitely ‘green’, ‘automation’ and ‘digital’. Features than enable these are finding favour with customers and investors alike. The steel sector is making abnormal profits and clearly cannot only kickstart the investment cycle but also shed its investment shyness and leapfrog private capital contribution that has been trailing for several years.The GDP for this year has been projected at 7.5% by the UN, 9.3% by Moody’s and 9.5% by CRISIL. The number would be higher or lower depending on how hard we are hit by the expected ‘third wave’. If the pace of vaccination is anything to go by, we believe the ‘third wave’ won’t hit us as badly as the ‘second wave’ and localised lockdowns will be continued on a regular basis until we reach a high percentage of population vaccinated. The Rs 6.3 trillion stimulus package announced by the Finance Minister, representing about 3 per cent of GDP, is mostly in the form of credit guarantees that do not need immediate spending. Direct fiscal measures are limited to extended free food grains scheme, health infrastructure credit guarantee scheme and additional spending on BharatNet, amounting to Rs 1.2 trillion. This will provide only token relief to the hard-hit sectors. The economic loss has been devastating. In April 2021, sales of passenger vehicles, including cars, SUVs and larger passenger vehicles, stood at the same level as that in 2016. Electricity consumption during the second wave was equal to that of 2014, sale of two wheelers has plunged to levels attained a decade ago and core industries slipped to levels attained in March 2017. In sum, we have gone back by three to five years in terms of demand and output. We expect to come back to pre-COVID levels by 2023-24 for several consumption and production indicators. In construction, the gross value added (GVA) has equalled the levels in 2018.While we find our way back to normalcy, the new normal would require a far more agile and innovative mindset. Considering that the construction industry is not very adaptive to technology and change, it is likely to face disruptions. Pratap Padode is Founder, ASAPP Info Global Group, and Founder & Executive Director at FIRST Construction Council and Smart Cities Council India.

Next Story
Infrastructure Energy

BPE opens new office and marketing experience centre in Noida

BPE, a prominent Indian multinational in power solutions, has inaugurated a new 14,000-square-foot office and marketing experience center in Sector 63, Noida. This state-of-the-art facility provides hands-on experience for both domestic and international clients, showcasing BPE’s comprehensive range of power and infrastructure solutions.The new center includes advanced meeting rooms, interactive spaces like an auditorium and games room, and a rooftop lounge cafeteria, all designed to enhance client engagement with BPE’s technology in an immersive setting. As part of “BPE 2.0 – Vision 2..

Next Story
Infrastructure Urban

VC Grid leads $1 million seed round for Pikndel

VC Grid, a syndicate fund, announced its participation in a $1 million seed funding round for Pikndel, an innovative logistics technology company transforming quick commerce delivery solutions for D2C and e-commerce brands. The funding round saw participation from several notable investors, including D2C Insider Angels, Breathe Capital, Venture Catalysts, and prominent industry leaders such as Akash Gupta from Zypp, Keshav Bhajanka and Sanjay Agarwal from Century Plywood, and Kanishka Sethia from Western Carriers, along with renowned family offices from Kolkata.Founded in 2022 by Siddharth Bat..

Next Story
Equipment

Five WOLFF cranes modernise Oslo’s Ulven district

In parallel with the rebranding of Wolffkran Norge AS into a wholly owned subsidiary of Wolffkran Holding AG, Wolffkran is involved in two building projects in Norway’s capital, Oslo, which are now nearing completion. With a total of five WOLFF cranes of type 7534.16 Clear, Wolffkran Norge AS is significantly involved in the urban modernization of the eastern Oslo district of Ulven, which has long been known more as an industrial suburb, on behalf of Norway’s largest construction company, Veidekke.Two WOLFF 7534.16 Clear cranes have been used over the past two years to build the “Ulvenkr..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000