Maintenance capital expenditure

The part of capital spending needed just to keep the existing business running at its current size. Everything above it is growth spending, and only growth spending is optional.

No company discloses the split, so it has to be estimated. Depreciation is the crude proxy. A better version scales the historical relationship between fixed assets and revenue: if a company has historically needed ₹1 of net fixed assets for every ₹3 of sales, then holding sales flat needs enough spending to replace the assets consumed, and the rest supports the sales increase.

A firm spending ₹460 crore of which ₹300 crore is maintenance is committing ₹160 crore to growth.

The distinction is what makes owner earnings meaningful. A business whose entire capital budget is maintenance has no discretionary cash at all, however large its reported free cash flow looks in a year it postponed the spending.