India Inc’s asset-turnover ratio declined to a new low of around 70 per cent in FY21, indicating a further decline in capacity utilisation across sectors last financial year owing to the pandemic. This raises a question on the companies’ ability to kick-start a fresh round of capacity expansion.

       The ratio was 78 per cent in FY20 and a record high of 116 per cent in FY06. Analysts expect a rise in the asset-turnover ratio and capacity utilisation in FY22 but say companies go for capacity expansion only when the figure approaches around 100 per cent. “The ...