Economic Growth and Consumer Demand - The economy is expected to grow at about 7% in the second quarter, supported by a spending surge following the implementation of lower GST rates on September 22 [2][10] - The third quarter is anticipated to be driven by consumer demand, particularly due to the festive and wedding season, with wedding-related expenditures estimated at ₹4.5-5 lakh crore [10][12] - Urban consumption has shown signs of recovery due to tax cuts, although it has been weak since last year [10][12] GST Impact and Economic Indicators - GST collections rose 4.6% year-on-year in October, reaching a five-month high of ₹1.96 lakh crore, indicating robust domestic demand [6][12] - The HSBC Manufacturing Purchasing Managers' Index (PMI) increased to 59.2 in October, reflecting strong domestic demand post-GST cuts [6][12] - Bank credit rose 11.5% year-on-year in mid-October, suggesting strong traction at the start of the festive season [12] Automotive and Consumer Durables Market - Approximately 470,000 cars, sedans, and SUVs were sold in October, marking a 17% increase from the previous year [7][12] - The waiting period for consumer durables has increased due to heightened demand, with estimates suggesting it may take 45 days for supply to normalize [7][12] Rural vs Urban Demand - Rural demand continues to support India's growth, with economists optimistic about its sustainability [9][12] - Urban demand remains a concern due to slower wage growth, which could impact overall consumption momentum [9][10] Global Economic Factors - US tariffs and a global growth slowdown may negatively affect services exports and hiring [11] - However, uncertainties related to tariffs and rising costs abroad could potentially benefit India's services sector through increased offshoring [11]

Market Trends - Domestic demand is surging [1] - Indian generics could make slimming cheaper worldwide [1]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The focus is shifting towards domestic demand in China due to a 90-day tariff truce between the US and China, while export performance remains under observation [2] - High-frequency indicators have been introduced to track property market trends and government expenditure [2] Summary by Relevant Sections Exports - June container forward prices are double the spot rate, indicating potential volume growth despite a slight drop in export indicators such as imports from Korea and shipping volumes [4] - Export growth is expected to slow in May before a potential recovery in June [4] Property Sector - Mixed signals are observed in the property sector, with new home sales slightly down compared to 2024, while secondary market transaction volumes have increased [4] - Land sales have surged by approximately 35% in May compared to the same period in 2024, which may support new home construction [4] - Local governments are issuing special Local Government Bonds (LGBs) to purchase idle land, although the scale is smaller than in 2018-2019 [4] Fiscal Spending - Net CGB funding has reached 40% year-to-date, significantly higher than the average of 26% over the past three years [4] - Total government spending has increased by 7.2% year-on-year, surpassing the average growth of 4% over the past three years [4] - The robust fiscal spending is expected to cushion against external economic challenges and maintain resilient domestic demand [4]