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Rating agency ICRA on AFriday said the growth momentum lost steam in November 2021 on the back of "some satiation" of pent-up demand as well as supply chain disruptions in parts of south India on account of untimely rainfall.

"As many as 12 of the 15 lead indicators recorded a deterioration in their YoY performance in that month, relative to October 2021. Moreover, the number of indicators surpassing their pre-Covid levels eased to seven in November 2021 from nine in October 2021.

"The early data for December 2021 is mildly positive, and second shot coverage appears set to rise to 61 per cent of Indian adults by the end of the month. However, it remains to be seen whether the existing Covid-19 vaccines will offer protection against the Omicron variant and avert a third wave in India," it said.

The ratings agency also said that amidst the heightened uncertainty generated by Omicron, convincing signs of a durable and sustainable recovery are yet to emerge.

"The YoY performance of 12 of the 15 high-frequency indicators deteriorated in November 2021 compared to October 2021 suggesting that the growth momentum lost steam, with some satiation of pent-up demand after the festive season.

"On the other hand, vehicle registrations, passenger vehicles (PV) output and non-food bank credit of scheduled commercial banks showed a modest YoY improvement in November 2021, relative to the previous month."

In month-on-month (MoM) terms, the agency cited that nine of the 13 non-financial indicators witnessed a decline in November 2021, broadly reflecting the impact of a higher number of festive-related holidays.

"Moreover, untimely heavy rainfall in the southern states appears to have led to supply chain disruptions, weighing upon activity in November 2021. Only the output of PV and Coal India Lted (CIL), domestic airlines' passenger traffic and auto retail volumes recorded an improvement in November 2021, relative to the previous month."

"In addition, 'FASTag' toll collections and retail payments declined in November 2021, after having reached all-time highs in October 2021, while the mobility for retail and recreation continued to improve sequentially."

The trend, the ICRA pointed out, was mixed when compared to the pre-Covid volumes of November 2019, with seven of the 13 non-financial indicators recording an improvement in November 2021 and six recording a deterioration.

"This is weaker than the performance in October 2021, when nine of the 13 indicators were higher than pre-Covid, the performance of motorcycle output and diesel consumption has slipped to below pre-Covid levels in November 2021 from above pre-Covid in October 2021.

"Early data for December 2021 reveals that the daily average generation of the GST e-way bills improved to 2.2 million during December 1-12, 2021 from the five-month low 2.0 million recorded in November 2021; however, we don't expect the October 2021 high to be surpassed."

In addition, merchandise exports have reportedly expanded by 44.4 per cent in YoY terms during December 1-14, 2021, although the momentum may slacken in the later part of the month during the year-end holiday period.

"After a YoY contraction in November 2021, the sales of petrol and diesel of state refiners have grown in the first half of December 2021.

"Moreover, the YoY growth in electricity demand rose to 2.9 per cent during December 1-14, 2021 from 2.1 per cent in November 2021 whereas the rail freight growth eased to 5.9 per cent YoY during December 1-10, 2021 from 6.1 per cent in November 2021," the agency said.