Rural demand is showing continued recovery. The festive and wedding season has boosted demand for travel, jewellery, watches, quick service restaurants (QSR), footwear, apparel and durables, reports PL Capital Group – Prabhudas Laladhar.
“We are already seeing acceleration in setting pace in railways, defence, power, data centers etc. The implementation of which will accelerate growth in FY26 and beyond,” said Amneesh Agarwal, Director, Institutional Research. .
“We expect a growth-oriented budget that will try to propel the economy and encourage the middle class to increase spending,” he added.
India’s investment story, discretionary consumption and financials are some of the key themes that have to reap long-term benefits.
Retail is on the brink of major change as instant commerce is changing the dynamics of not only grocery but other discretionary segments as well.
“We believe that the expansion of quick trade in the discretionary segment and food services may create near-term disruptions in the respective segments and impact profitability,” the report said.
Cement should show better growth and profitability as a result of the recovery in construction activity and the expected increase in prices. According to the report, the fortunes of the steel industry depend on import duties and global price trends.
Capital goods and defense should see better ordering momentum and execution in the coming quarters.
“The budget will hold the key to investment sustainability with targeted spending cuts in FY25. However, defence, power, data centres, railways and energy transition remain strong themes,” the report noted.
As we enter and move into 2025, agriculture seems to be moving towards a good rabi crop and normal weather patterns to moderate inflation to 4.3-4.7% in FY26. Help will come.
Higher crop production and pick-up in construction/factory activity and moderate inflation should bolster demand from the end of the fourth quarter of FY25, the report said.