SBICAPS Report - "EcoCapsule"- Rising Domestic Tides amid Global Economic Rebound and Policy Conundrums
MANUFACTURING FERVOUR ACCOMPANIES SERVICES’ EXUBERANCE
Positive surprise in manufacturing in Q3FY24 GVA likely continued in Q4FY24 as indicators show buoyancy
• Manufacturing PMI showed its highest reading in 16 years on the back of expansion in new orders due to demand pick-up and steep rise in investment goods.
• Eight Core index showed impressive growth in 11MFY24 (7.7% y/y), with activity strongest in electricity and infra-forward sectors
• India remains a net importer of steel in 11MFY24, despite exports surging in Feb’24. India is expected to record much better demand in CY24 vs. the world
• IIP growth picked up in 10MFY24, driven by infrastructure and capital goods, as non-core sectors slightly lag. A pick-up from these could be seen soon as their financials have improved soundly.
Services activity is strong, translation into consumption GDP awaited
• Services activity displayed uptick in momentum with healthy demand conditions and efficiency gains driven by financial services industries.
• PV sales are up 10% y/y in 11MFY24, with buoyancy in 3W. 2W sales also show a decent increase, belying narratives of rural distress
• Power consumption grew by a modest 1.4% y/y to 129.9 bn units in Mar’24, as pleasant weather across the country warranted lower use of heating equipment.
• Renaissance in steel and thermal power sectors is a driver of railway freight loading, offset by sharp decline in foodgrains, leading to 4% y/y rise in 11MFY24 • UPI transactions value saw a huge upsurge, and growth remained above 40% y/y in every month of FY24
