Is India's capex cycle recovering or do hurdles persist?

This has stoked optimism that after months of stagnation, India's capex cycle may be inching towards an upswing.

Adrian Mowat, Chief EM & Asian Equity Strategist, JPMorgan Chase, says if you look at some of the early indicators for corporate capex, such as truck sales, they are now turning around and looking very encouraging. The PMIs, which are still a very low number, at least are moving up, he adds.

We are looking at the first two months of cement sales past 10 percent. So there is a degree of momentum building in some of the leading indicators of capex and we have a decline really in the real interest rates for the industrial sector and that looks very encouraging, he says.

Cement manufacturers agree. They say demand is picking up in markets in North India, and that should help companies revive capex plans that had been put on ice.

Atul Daga, CFO, UltraTech Cement points out, January onwards, an uptick has been seen in volumes. Prices have moved in line with demand pick-up.

But, a report by CMIE says this optimism may be a little premature.

The report says the ratio of stalled projects in terms of value has risen to 12.3 percent of total projects under implementation in FY16, against around 5 percent in FY11

Mahesh Vyas, MD & CEO, CMIE highlights that new business announcements and stalled projects, together give a different story, which indicates that the current economic environment is not good enough for investors to come out and say they are going to set up more projects. The reason is stalled projects are not getting stalled because of any specific reason. They are getting stalled because economic conditions are not good enough; the business environment is not good.

So it's more than likely that any green shoots visible are more the exception than the norm. Unless, of course, something drastic happens that kickstarts a broad-based economic recovery.