Private sector project announcements experienced a dramatic 70% jump in Q1FY27, reaching ₹13.1 trillion according to CMIE data. This surge was primarily driven by power sector projects, with the sequential increase in new electricity projects reaching an impressive 398%. Manufacturing emerged as the second major contributor with a 17.3% quarter-on-quarter increase. However, other key sectors including mining, non-financial services, and construction and real estate witnessed significant declines during the same period. The surge is partly attributed to the impact of the West Asia war in Q4FY26, when private sector capex announcements fell to ₹7.5 trillion, the lowest in three quarters.
In stark contrast to private sector growth, government capex announcements more than halved both year-on-year and quarter-on-quarter, touching ₹1.4 trillion in the same period. As reported by Ambit Institutional Equities Strategy, government capex is constrained by fiscal pressures and the crude import shock. The total new project announcements, including both private and government projects, were worth ₹14.5 trillion, representing a 28.6% increase on an aggregate basis. According to the latest CMIE data, this represents a 28.6% year-on-year increase in total project announcements.
The power transmission and distribution sector has benefited significantly from the government's roadmap for integrating 900 gigawatts of non-fossil fuel capacity by 2035-36, according to a Nuvama Institutional Equities report. This ambitious plan implies approximately ₹7.93 trillion worth of transmission capex. The 900 GW plan was announced in March, providing substantial momentum for power sector investments. The surge in private capex announcements is also partly attributed to the impact of the West Asia war in Q4FY26, when private sector capex announcements fell to ₹7.5 trillion, the lowest in three quarters.
Despite the strong capex announcements, Nuvama reports that private capex remains concentrated in select sectors with gradual order conversion. Non-power industrial companies reported modest growth of 10% year-on-year with lower margins, impacted by commodity and freight inflation along with INR depreciation. Market expert Anand Tandon noted that while the power sector is experiencing significant momentum, private sector capex may need more time to definitively turn a corner, with some recent drivers like cement showing signs of slowing down. "Both globally and domestically, the power sector is on a roll," Tandon said, adding that private sector capex may need more time to definitively turn a corner.
Overall project completions declined significantly by 56% on a sequential basis in the June quarter. According to Ambit Institutional Equities, private sector project completions fell by 49%, while government sector project completions were down over 60% sequentially. This completion gap highlights the challenge of translating announced projects into actual execution, particularly as fiscal pressures continue to constrain government infrastructure spending. The surge in private capex announcement numbers is also partly helped by the impact seen in Q4FY26 due to the West Asia war.
