Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

GDP growth to moderate to 6.0% in Q3 FY2024, led by agriculture and industry: ICRA

Posted On: 2024-02-21 16:07:05 (Time Zone: IST)


ICRA has projected the year-on-year (YoY) growth of the GDP to moderate sequentially to 6.0% in Q3 FY2024 from 7.6% in Q2 FY2024. Further, the GVA growth is estimated to ease to 6.0% in Q3 FY2024 from 7.4% in Q2 FY2024, driven by the industrial (to +8.8% from +13.2%) and agriculture (to +0.5% from +1.2%) sectors, amidst an improvement in services (to +6.5% from +5.8%). The anticipated deterioration in the industrial sector growth in Q3 FY2024 is partly attributable to an adverse base effect (+2.3% in Q3 FY2023 vs. -0.5% in Q2 FY2023) and a deceleration in volume expansion (IIP growth of 5.8% in Q3 FY2024 vs. 7.8% in Q2 FY2024), even as the continued deflation in commodity prices kept profitability of some sectors favourable. Additionally, a mild 0.2% contraction in the total spending of Government of India and 25 state governments (all states except Arunachal Pradesh, Goa and Manipur) in Q3 FY2024 (+18.3% in Q2 FY2024) is expected to have dulled the GVA growth in the quarter.

Ms. Aditi Nayar, Chief Economist, Head-Research & Outreach, ICRA Ltd. said: "Lower volume growth for the industrial sector, flagging momentum in certain indicators of investment activity, a slowdown in Government expenditure and an uneven monsoon are expected to dampen the GDP growth to 6.0% in Q3 FY2024 from 7.6% in Q2 FY2024."

ICRA estimates the industrial GVA growth to record a broad-based moderation to 8.8% in Q3 FY2024 from 13.2% in Q2 FY2024, led by all four sub-sectors, namely, manufacturing (to +10.0% from +13.9%), electricity (to +8.0% from +10.1%), construction (to +7.0% from +13.3%), and mining and quarrying (to +7.0% from +10.0%). ICRA projects manufacturing GVA expansion at a healthy 10.0% in Q3 FY2024, twice as high as the 4.7% seen in Q1 FY2024, albeit lower than the 13.9% recorded in Q2 FY2024, amid a deceleration in volume growth as reflected in the manufacturing IIP. The YoY growth in electricity generation tempered in Q3 FY2024 owing to moderation in demand (to +9.4% from +11.7%, respectively) with the onset of the winter season. Moreover, the pace of construction activity is anticipated to have slackened in Q3 FY2024 relative to Q2 FY2024, with the YoY growth in production of cement (to +4.5% from +10.4%), and steel (to +8.6% from +15.4%) witnessing a deterioration.

The momentum in India's investment activity moderated in Q3 FY2024, with an easing in the YoY growth of nine of the 11 investment-related indicators, relative to Q2 FY2024. For instance, the capital outlay and net lending of 25 state governments shrank by 3.9% on a YoY basis, after having surged by 42.4% in Q2 FY2024. Further, the YoY expansion in the Government of India's (GoI's) gross capex dipped slightly to 24.4% in Q3 FY2024 (-9.4% in Q3 FY2023) from 26.4% in Q2 FY2024 (+42.4% in Q2 FY2023), despite a low base. Other indicators reporting a slowdown in growth in this period include engineering goods imports, infra/construction goods output and CV registrations.

Owing to the decline in output across all major kharif crops projected by the First Advance Estimates, ICRA projects the growth in agriculture, forestry, and fishing to dip to a muted 0.5% in Q3 FY2024 from 1.2% in Q2 FY2024. This would be the lowest growth print for the sector since Q4 FY2019 (-0.9%).

In contrast to industry and agriculture, ICRA estimates the services GVA YoY growth to rise to 6.5% in Q3 FY2024 from 5.8% in Q2 FY2024, led by trade, hotels, transport, communication and services related to broadcasting (to +8.0% from +4.3%). Several high frequency indicators related to this sub-sector displayed an improvement in their YoY growth in Q3 FY2024 relative to the previous quarter. This sub-set includes air cargo traffic, ports cargo traffic, GST e-way bills, railway freight, services exports, and the number of telephone subscribers.

However, the GoI's non-interest revenue expenditure contracted by a significant 19.1% in Q3 FY2024, after having expanded by 23.2% in the prior quarter, which would dampen the performance of public administration, defence and other services (to +5.0% from +7.6%). Moreover, the combined revenue expenditure of the aforesaid 25 state governments witnessed a lower YoY growth of 7.5% in Q3 FY2024, compared to 10.7% in Q2 FY2024. In aggregate, the total expenditure of the GoI and 25 state governments shrank by 0.2% in YoY terms in Q3 FY2024, after having expanded by 12.1% and 18.3%, respectively, in YoY terms in Q1 FY2024 and Q2 FY2024.

Shares of ICRA Limited was last trading in BSE at Rs. 5994.95 as compared to the previous close of Rs. 5968.00. The total number of shares traded during the day was 478 in over 167 trades.

The stock hit an intraday high of Rs. 6158.80 and intraday low of 5892.75. The net turnover during the day was Rs. 2888908.00.


Click here to send ur comments or to feedback@equitybulls.com

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

MakeMyTrip Report Reveals Where, How, When and With Whom India Travels

ICRA revises banking sector outlook to Stable from Positive

Massive shift in career aspirations as 8 out of 10 professionals eye new career paths this appraisal season, reports apna.co

ICRA: Annual securitisation volumes estimated at Rs. 1.88 lakh crore for FY2024

46% of women opted for used cars in March 2024 in the country: Spinny Reports

Addressing data privacy, security and ethical challenges is essential for the responsible adoption of GenAI in healthcare: PwC India report

Retail pools continue to display stable performance across various asset classes: ICRA

ICRA predicts small finance banks will raise over Rs 10,000 crore in FY 2024, up from Rs 6,400 crore in FY2023

CRISIL Ratings: Complex fertilisers volume to grow 4-5% next fiscal

Issuances of securitised debt instruments (SDI) by corporate entities to rise to Rs 100 crore in FY2024: ICRA

Godrej Interio's 'HomeScapes' Study reveals Indians want ‘Me-Time’ at home

Indian stock exchanges rank first in the world in terms of the number of IPOs in 2023

CRISIL Ratings: After soaring this fiscal, airlines to land >20% operating profit growth next fiscal

Rising frauds propel demand for AI/ML strategies: Experian Study

Cement makers to add 150-160 MTPA capacity by fiscal 2028 - CRISIL

Investor exuberance propelling broking industry performance, MTF achieves a new high: ICRA

CRISIL Ratings: Securitisation volume up ~20% in first nine months of this fiscal

India is fastest growing large economy globally in CY2023-CY 2024 - Pantomath Report

CRISIL Ratings: Market share of gold-loan NBFCs steady despite bank competition

CRISIL Ratings: Vehicle loan AUM to vroom past Rs 8 lakh crore next fiscal

45% of Newbie traders claim that 'not knowing enough' is the primary reason for losses incurred in Futures & Options trading - Sharekhan's survey reveals

CRISIL Ratings: Agri pump makers to see 7-9% revenue growth next fiscal

Indian mutual fund industry likely to sustain its strong inflows in 2024: ICRA Analytics

CRISIL Ratings: Operating profit of offshore rig operators to swell 30% next fiscal

CRISIL Ratings: Organised F&G retailer revenue to grow in mid-teens next fiscal

CRISIL Ratings: Shippers see a further revenue dip of 5-7% next fiscal as charter rates course correct

82% of professionals are concerned about job redundancy due to emerging technologies: Hero Vired Report

UPI transactions witnesses 118% rise at retail stores in 2023: PayNearby Report

Happy Forgings Limited - IPO - A trusted supplier for several Indian and Global OEMs - Reliance Securities

CRISIL Ratings: Penetration of electric buses set to double next fiscal

India's refined copper consumption to grow by 11% in FY2024, despite global headwinds: ICRA

CRISIL Market Intelligence and Analytics - Curb on cane juice for ethanol - Sugar output lift

Stable Repo Rates to Keep the Momentum Going for the Housing Market - Anuj Puri, Chairman - ANAROCK Group

Payback period for investment in sustainable warehouses come down to three years in India: A JLL - IndoSpace report

CRISIL Ratings - Profit margins of cotton yarn spinners to plunge 250-350 bps to decadal lows of 7-8% this fiscal

Government, PSUs, and Defence sector experience 14% upsurge in hiring: foundit Insights Tracker

CRISIL Ratings: Spirits high for organised liquor makers, revenues seen up 13%

Corporate bond market to more than double by fiscal 2030 - CRISIL

Gas Utilities : Gas consumption at record highs, growth now to trickle - Kotak Institutional Equities

Emkay and Geojit increase target prices of LIC, expect over 20% upside

CRISIL Ratings: Mall area to rise by 35% over the medium term on retail surge

Crop & Chemical Dashboard: Bottom is near, recovery unclear - Kotak Institutional Equities

Loan sell-downs of personal loan pools may see a temporary pause following the RBI's decision to increase risk weights: ICRA

India Surges Ahead in 5G Deployment, Paving the Way for a High-Tech Future!

CRISIL Ratings: Construction equipment revenue to grow 14-15% this fiscal

India to contribute 22% to the Global ER&D sourcing market by FY30: BCG-nasscom Report

CRISIL Ratings: In a decadal first, revenue of agrochemicals makers to slip ~3% on tepid demand this fiscal

CRISIL Ratings: Flexible packaging industry stares at decadal low profitability as oversupply stings

CRISIL Ratings: Domestic demand, softer cotton prices to sustain RMG growth

CRISIL Ratings: Higher workplace occupancy to light up cigarette volume 7-9%


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020