TOP 1000 Companies Economic Review For The First Half of FY 2024-2025

Methodology We bring you the Vital Financial Data of Top 1,000 companies sorted by market capitalisation, as these are the stocks where liquidity is higher, and they represent a substantial portion of the trade as well as the market cap of the Indian listed companies. These companies are then categorised into different sectors to provide you with an insight into the general trend of the financial performance for the first half of FY25 against the first half of FY24. The raw data has been sourced from Accord Fintech Pvt Ltd (Ace Equity). The focus of financial data was more on revenue and profitability as many companies do not provide a balance sheet on a half-yearly basis. We hope that our readers get an overall perspective of the different sectors so that they are able to take stock and sectoral calls effectively 

Compiled By - Abhishek Wani, Ashwin Urkude, Gaurav Taparia, Gyanesh Patodiya, Kamal Mansuriya, Mandar Wagh, Mohit Zunje, Manoj Reddy Sama, Pushkar Shinde, Prajwal Wakhare, Rakesh Deshmukh and Siddharth Mane. 

Agriculture [EasyDNNnews:PaidContentStart]
Initiatives Will Drive Sustainability 

India is a global leader in the agriculture sector and serves as the primary livelihood source for approximately 50 per cent of its population and contributes 18.2 per cent to the country’s GDP at the current prices. The country boasts the world’s largest cattle herd, the most extensive areas under wheat, rice and cotton cultivation, and ranks as the largest producer of milk, pulses and spices. Additionally, India is the second-largest producer of fruits, vegetables, tea, farmed fish, sugarcane, wheat, rice and cotton, as well as the second-largest exporter of sugar. 

With the second-largest agricultural land area in the world, the agriculture sector generates employment for nearly half of India’s population, underscoring the vital role of farmers in sustaining the nation. The Indian food processing industry represents 32 per cent of the country’s total food market, making it one of the largest industries in India. It ranks fifth globally in terms of production, consumption, exports and expected growth. 

India’s food grain production reached 330.5 million metric tonnes (MT) in 2022-23, as per the third advance estimate. The country holds the position of the second-largest producer of food grains, fruits and vegetables. For the Kharif marketing season (KMS) 2023-24, rice procurement is anticipated to reach 521.27 lakh metric tonnes (LMT), an increase from the 496 LMT procured in the previous season of 2022-23. This highlights the contribution of the agriculture sector to the nation’s food security and GDP besides the employment opportunities it generates, especially for those living in the villages. 

Financials To analyse the financial performance of the sector, we compared the results of companies within this sector between H1FY25 and H1FY24. Overall, the sector exhibited lacklustre growth across key parameters such as sales, profit before interest, depreciation, and tax (PBIDT), as well as profit after tax (PAT). The sector’s aggregate top-line recorded a marginal growth of 6.25 per cent, rising from ₹51,474.39 crore in H1FY24 to ₹54,689.62 crore in H1FY25. However, the PBIDT experienced a significant decline of 24.96 per cent, dropping from ₹5,848.50 crore in H1FY24 to ₹4,388.79 crore in H1FY25. 

Similarly, the aggregate PAT fell by 34.13 per cent, decreasing from ₹3,131.07 crore in H1FY24 to ₹2,062.45 crore in H1FY25. Among the top five companies in the agriculture sector by market capitalisation, three—Tata Consumer Products, Bombay Burmah Trading Corporation and CCL Products— reported positive growth in H1FY25. In contrast, EID Parry and Balrampur Chinni Mills registered negative growth. Notably, of these five companies, only CCL Products achieved positive YoY growth in PAT while the other four companies reported a decline in this metric. 

Outlook India’s agricultural sector is poised for significant growth, underpinned by robust exports and government initiatives. Agricultural and processed food product exports reached USD 4.34 billion during April-May, 2024-25, highlighting the sector’s global relevance. The food and grocery market, ranked as the sixth-largest globally, benefits significantly from the food processing industry, which contributes 32 per cent to this market. As one of India’s largest industries, food processing accounts for 13 per cent of the total exports and 6 per cent of industrial investments, underscoring its pivotal role in the economy. 

By 2025-26, the food processing industry is expected to grow to USD 535 billion, fuelled by government initiatives like USD 1 trillion in planned infrastructure development and programmes such as the Pradhan Mantri Kisan Sampada Yojana. Similarly, the food service market is forecasted to expand at a CAGR of 11.19 per cent, reaching USD 79.65 billion by 2028, compared to USD 41.1 billion in 2022. In alignment with modernisation goals, the government is encouraging the use of drones in agriculture through financial assistance under the Sub-Mission on Agriculture Mechanisation. 

Additionally, efforts to make India a global hub for ‘Shree Anna’ (millets) are advancing, with the Indian Institute of Millet Research, Hyderabad, designated as a Centre of Excellence for international knowledge-sharing and technological innovation. The establishment of an Agriculture Accelerator Fund further underscores the sector’s growth potential by fostering agricultural start-ups and promoting entrepreneurship among the rural youth. These initiatives collectively position India’s agricultural sector for sustained growth and global competitiveness. 

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Automobile & Ancillaries 
An Electrically Charged Future 

I ndia’s automotive industry, a longstanding indicator of economic wellbeing, is experiencing a remarkable resurgence fuelled by rising demand and an eye toward sustainability. Two-wheelers occupy the top slot, driven by a burgeoning middle-class and a young population eager for mobility. The rural markets are further propelling growth while increasing needs for logistics and passenger transportation are boosting the demand for commercial vehicles. However, the future shines the brightest for electric vehicles, particularly three-wheelers and small passenger cars. 

The automobile industry produced a total of 28.43 million vehicles including passenger vehicles, commercial vehicles, three-wheelers, two-wheelers and quadricycles from April 2023 to March 2024. India holds a strong position in the international heavy vehicles’ arena as it is the largest tractor 

manufacturer, second-largest bus manufacturer and the third-largest heavy trucks manufacturer in the world. The automobile sector resulted in 5.27 per cent of the total FDI inflow as per the June 2024 DPIIT report. 

The electric vehicles (EVs) market is expected to grow at CAGR of 49 per cent from 2022 to 2030 and the EV industry would create 5 million direct and indirect jobs by 2030. In the automobile market in India, two-wheelers and passenger cars accounted for 75.3 per cent and 17.6 per cent market share, respectively. Passenger car sales are dominated by small and mid-sized cars. The export of total number of automobiles in 2023-24 was recorded at 4,500,492 out of which two-wheelers accounted for about 76.8 per cent of the total exports. The automotive components industry accounted for 2.3 per cent of India’s GDP and provided direct employment to more than 1.5 million people. 

By 2026, the automobile component sector will contribute 5-7 per cent of India’s GDP. The Automotive Mission Plan (2016-26) projects to provide direct incremental employment to 3.2 million people by 2026. The industry is a leader in exports and provides jobs to over 3.7 crore people. In 2023-24, the export value of automotive components or parts was estimated at USD 21.2 billion. North America, which accounts for 32 per cent of the total exports, increased by 5 per cent, while Europe and Asia, which account for 33 per cent and 24 per cent of the total exports, respectively, increased by 12 per cent while the growth curve for Asia remained flat. 

The key export items included drive transmissions and steering, engine components, body and chassis, suspension and braking, etc. From among the major EV companies in India, Ola Electric Mobility Ltd. listed its IPO in FY25 and became the first automotive company in India to launch an IPO in over two decades. Ather Energy is going to be listed in around January 2025. On October 22, 2024, Hyundai Motor India Limited listed the biggest IPO of India of its kind with an issue size of `27,870 crore. 

Financials Automobile ancillary companies, which can be attributed as a sub-sector of automobile companies, play a very important role. They have a total market capitalisation of approximately ₹53,000 crore, which is contributed by 36 listed entities. Our financial analysis of the automobile ancillary stocks shows that Samvardhana Motherson International had the highest PAT, net sales and market capitalisation in H1FY25. In the automobile two-wheeler and three-wheeler industry, Bajaj Auto had the highest PAT, net sales and market capitalisation in H1FY25. 

In the passenger car segment, Mahindra and Mahindra stood with the highest net sales and market capitalisation while Maruti Suzuki India had the highest PAT in H1FY25. In terms of tractors, trucks and light commercial vehicles, Tata Motors had the highest PAT, net sales and market capitalisation in H1FY25. In the segment of batteries, Exide Industries had the highest PAT, net sales and market capitalisation in H1FY25 while in the segment of tyres and allied products, Balkrishna Industries had the highest market capitalisation while MRF had the highest PAT and net sales in H1FY25. 

Outlook Looking towards the future, the Indian automotive industry is poised for robust growth. Favourable economic conditions, rising disposable incomes, a young population and supportive government initiatives are all contributing to this positive outlook. The electric vehicle segment, in particular, holds immense potential, with both domestic and global markets anticipating significant growth. 

Banking 
Operational Efficiencies Trigger Growth 

The Indian banking ecosystem is diverse and robust, comprising 13 public sector banks, 21 private sector banks, 44 foreign banks, and 12 small finance banks. By June 2024, the total count of micro-ATMs in the country reached an impressive 1,517,580. In 2024, the total assets in the public and private banking sectors stood at USD 1,861.72 billion and USD 1,264.28 billion, respectively. Public sector banks accounted for 59.53 per cent of the total banking assets, including public, private and foreign banks. 

Interest income for the public sector banks was USD 128.1 billion in 2024, while private banks reported USD 95.7 billion. India’s digital payment ecosystem has experienced phenomenal growth, driven by government and Reserve Bank of India initiatives. As of FY25 (up to June), UPI transaction volumes reached 2,762 crore, with India contributing nearly 46 per cent of the global digital transactions (based on 2022 data). As of July 2024, 602 banks were actively leveraging UPI. 

Financials
The financial performance of 13 private and 10 public sector banks for H1FY25 reveals contrasting growth trends:
1. Private Banks: These banks outshined their public counterparts with a 16.98 per cent growth in net interest income (NII). 

Notable contributors included HDFC Bank (26 per cent NII growth) and ICICI Bank (14 per cent). The operating profits rose by 17.92 per cent, and profit after tax surged by 19.40 per cent, driven by HDFC Bank’s 21 per cent profit growth. Kotak Mahindra Bank also recorded an exceptional 45 per cent rise in profit, highlighting operational excellence. 

2. Public Sector Banks: Public banks posted a modest 7.41 per cent growth in NII. However, profit after tax grew by 26.27 per cent, reflecting improvements in cost efficiency and asset quality. Indian Overseas Bank led the pack with a remarkable 174 per cent increase in profits, followed by Punjab National Bank with 26 per cent growth. The operating profit growth stood at 15.23 per cent, although it lagged behind the private sector’s growth rate. 

Overall, private banks demonstrated consistent growth with high margins, while public sector banks showed strong recovery, particularly in profitability. Among the private banks, HDFC Bank emerged as the top performer, while Indian Overseas Bank led among the public sector banks. 

Outlook
The banking sector is poised for steady growth despite some challenges, as outlined below:

• Credit Growth and Margins: FY24 witnessed record-high credit expansion. However, rising deposit costs over the past 18 months have compressed margins. A potential rate cut in the latter half of FY25 could further impact margins as loans are re-priced. Nevertheless, sustained loan book growth is expected to support operating profits and meet the capital requirements.
• Neobanking Revolution: Digital-only banks, or neobanks, are likely to gain momentum. Offering personalised, branch-free banking solutions, they are expected to enhance customer experience and widen financial access.
• Cyber Security Investments: With a surge in digital transactions, banks will focus on strengthening cyber security frameworks. Blockchain technology and advanced security protocols will play a critical role in safeguarding digital platforms.
• AI and Automation: The adoption of AI-driven tools and automation will accelerate. Applications such as chatbots, automated loan processing and predictive analytics will improve efficiency, reduce costs and enhance customer satisfaction. 
   

The Indian banking sector is evolving with digitalization and fintech integration, as services like UPI drive record-breaking adoption, surpassing 10 billion monthly transactions in 2024. Government efforts like PMJDY have advanced financial inclusion, adding over 450 million accounts and increasing rural banking access. Direct Benefit Transfers further enhance service demand among underbanked populations. Rising middle-class incomes also boost demand for loans, credit cards, and savings products, with 60 per cent of households increasing financial service spending, signaling strong growth potential. 

The Indian banking sector showcases a blend of resilience and innovation. While private banks continue to lead in growth metrics, public sector banks are catching up with improved profitability and operational efficiency. As digital and technological advancements reshape the landscape, the sector is well-positioned for long-term growth. 

Capital Goods 
Key Sectors to Drive Growth 

I ndia’s capital goods manufacturing industry serves as a critical backbone for the country’s economic growth, providing essential machinery, equipment, and tools for sectors like engineering, construction, infrastructure and consumer goods. This sector contributes 12 per cent to India’s overall manufacturing output and accounts for 1.8 per cent of the country’s GDP. In recent years, it has witnessed significant growth, fuelled by both government and private sector investments. 

In FY 2024, government spending on infrastructure and defence surged, with a 28 per cent rise in railway investments and a 10 per cent increase in defence spending, boosting the demand for machinery and innovations in the capital goods sector. Capital expenditure in infrastructure and manufacturing grew by 6-8 per cent, while renewable energy investments rose by 18 per cent, driving the production of energy-efficient equipment, including solar and wind technologies, and highlighting sustainability-focused growth. 

Emerging sectors like electric vehicles (EVs), data centres and industries supported by the Production-Linked Incentive (PLI) scheme are driving growth in India’s capital goods sector. These industries contributed 10 per cent of the sector’s output in FY 2024 and are expected to rise to 25 per cent by FY 2028. The PLI scheme boosts domestic manufacturing and innovation in areas such as electronics, automotive components, renewable energy equipment, enhancing production capacity and exports. 

The engineering sector, which accounts for 27 per cent of the industrial factories and 63 per cent of foreign collaborations, is the largest segment in the capital goods industry. Competitive advantages like cost efficiency and innovation fuel its growth, supported by government investments in infrastructure and manufacturing. The electrical equipment industry is also expanding, driven by rising demand for renewable energy solutions like solar and wind power. Investments in smart grids and energy-efficient technologies further strengthen the sector’s role in India’s economic progress. 

Financials
KP Green Engineering and NIBE Ltd., prominent players in the engineering and defence sectors, have demonstrated steady growth in net sales and profitability. These companies have achieved higher revenues, operating profits and net profits, while maintaining robust profit margins, reflecting efficient cost management and operational effectiveness. Similarly, industrial equipment firms like Rajoo Engineers Ltd. and Skipper Ltd. have seen significant growth in net sales,



profitability, and share price performance. 

Companies such as Balu Forge Industries Ltd., Paras Defence and Space Technologies Ltd., Jyoti CNC Automation Ltd. and Suzlon Energy Ltd. have consistently sustained healthy profit margins, showcasing operational efficiency. In the electric equipment segment, Insolation Energy has reported remarkable financial and stock market performance, driven by rising sales and increasing profitability margins. Engineering firms like Kernex Microsystems and Transformers & Rectifiers have also recorded notable growth in the recent quarters. 

Outlook
The capital goods market in India is poised for steady growth, with revenue expected to increase by 9-11 per cent in FY 2025. This growth is fuelled by significant government investments in key sectors such as railways (including metro projects), highways, defence and renewable energy. Private sector initiatives in launching new projects and expanding the existing ones are also contributing to this positive trajectory. However, the growth rate is anticipated to be slightly lower than FY 2024’s 13 per cent, primarily due to weaker export demand resulting from ongoing geopolitical challenges. 

India’s capital goods industry turnover is projected to grow from USD 92 billion in 2019 to USD 115.17 billion by 2025, while engineering goods exports are expected to reach USD 200 billion by 2030. The electrical equipment market is set to expand to USD 72 billion by 2025, driven by a robust CAGR of 9 per cent, with renewable energy and infrastructure demands as key drivers. The construction equipment market is forecast to grow at a CAGR of 15 per cent, with projected sales of 165,097 units by 2028, reflecting rapid infrastructure development. 

The defence sector also presents immense growth potential, backed by strong government initiatives. The central government aims to increase India’s defence exports to USD 6 billion by 2030 and has identified domestic contracts worth USD 57.2 billion for the industry from 2025 to 2027. These measures align with India’s commitment to self-reliance under the Atmanirbhar Bharat initiative. 

Chemicals
Creating the Right Equation 

I ndia’s chemical industry is highly diversified, encompassing bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, polymers and fertilisers. As the sixth-largest chemical producer globally and the third-largest in Asia, the industry contributes 7 per cent to the country’s GDP. Currently valued at around USD 220 billion, the sector is projected to grow to USD 300 billion by 2030 and reach USD 1 trillion by 2040, positioning itself as a significant opportunity hub amidst global economic uncertainties. 

India ranks as the fourth-largest producer of agrochemicals worldwide, following the United States, Japan and China, and contributes 16-18 per cent to the production of global dyestuffs and dye intermediates. From April to May, 2024, the country’s exports included USD 661.18 million in agrochemicals, USD 379.61 million in dyes, and USD 27.87 million in dye intermediates. The Indian colorants industry holds a notable 15 per cent share of the global market. 

The chemical industry operates under a largely de-licensed framework, with exceptions for certain hazardous chemicals. Renowned as a global leader in generics and biosimilars, India also plays a pivotal role in vaccine manufacturing, supplying over 50 per cent of the global vaccine demand. On the international stage, India ranks 14th in chemical exports and 8th in imports (excluding pharmaceuticals), underscoring its strong presence in global trade. 

Financials
To analyse the financials of the sector, we compared the performance of companies in this sector between H1FY25 and H1FY24. Overall, the sector demonstrated resilience across various parameters such as sales, profit before interest, depreciation and tax (PBIDT), as well as profit after tax (PAT). 

The sector’s aggregate top-line recorded a marginal increase of 2.88 per cent, rising from ₹213,641.65 crore in H1FY24 to ₹2,19,795.89 crore in H1FY25. Similarly, the PBIDT showed moderate growth of 4.85 per cent, increasing from ₹28,003.08 crore in H1FY24 to ₹29,360.88 crore in H1FY25. 

However, the sector’s PAT declined by 12.08 per cent, falling from ₹16,451.99 crore in H1FY24 to ₹14,465.17 crore in H1FY25, despite the moderate increase in both the top-line and PBIDT during the same period. In H1FY25, among the top five companies in the sector based on market capitalisation—Asian Paints, Pidilite Industries, Solar Industries India, SRF Limited and PI Industries—positive sales growth was observed for all except Asian Paints. 

Notably, Solar Industries India posted double-digit YoY growth of 13 per cent. Pidilite Industries, SRF Limited and PI Industries reported single-digit growth of 4 per cent, 6 per cent, and 7 per cent, respectively. Out of these five companies, only Asian Paints and SRF Limited reported losses, while the remaining three demonstrated positive YoY growth in PAT during the same period. The financial performance of such companies indicates the potential that they can tap in the coming years as consumer demand drives manufacturing operations and sales. 

Outlook
The Indian chemical industry is poised for robust growth, supported by government initiatives and strong sectoral investments. The government has introduced measures such as mandating BIS-like certification for imported chemicals to curb the influx of cheap and substandard products. Recognised as a critical driver of economic growth, the sector is targeted to contribute 25 per cent to the GDP in the manufacturing sector by 2025. In the Interim Budget 2024-25, an allocation of ₹192.21 crore (USD 23.13 million) was made to the Department of Chemicals and Petrochemicals to support its development. 

India’s top 20 listed chemical companies have significantly increased their capital expenditure over the past decade. The average annual capital expenditure for bulk and specialty chemical companies surged from ₹33 billion during FY12-15 to ₹70 billion in FY19-21, and further accelerated to ₹116 billion in FY22-24, reflecting robust growth across both the segments. Valued at USD 254 billion in 2023, the Indian chemical industry is expected to grow at a CAGR of 9 per cent, reaching USD 304 billion by 2025. 

Foreign direct investment (FDI) continues to play a vital role and the sector is projected to attract an FDI investment of ₹8 lakh crore (USD 107.38 billion) by 2025, underscoring its growth potential. Additionally, on September 14, 2023, Prime Minister Narendra Modi laid the foundation stone for development projects worth over ₹50,700 crore (USD 6.11 billion), further bolstering the sector’s growth trajectory. The Indian chemical industry is set to capitalise on emerging opportunities and drive substantial contributions to the nation’s economy. 

Construction 
Positioned for Stupendous Growth 

The construction industry is the backbone of our modern world, from towering skyscrapers to intricate bridges, crafting the very fabric of neighbourhoods, towns and cities. The construction industry in India consists of real estate and the urban development segment. The real estate segment covers residential, office, retail, hotels and leisure parks, among others. The urban development segment broadly consists of sub-segments such as water supply, sanitation, urban transport, educational institutions and healthcare facilities. 

The construction industry in India is expected to reach USD 1.4 trillion by 2025. By 2030, Indian cities are projected to generate 70 per cent of the nation’s GDP, with 600 million people expected to reside in urban centres, creating demand for 25 million additional mid-end and affordable housing units. The construction industry spans 250 sub-sectors, interlinked across the economy. Under the National Infrastructure Pipeline, USD 1.4 trillion is allocated for infrastructure development, with 24 per cent for renewable energy, 18 per cent for roads and highways, 17 per cent for urban infrastructure and 12 per cent for railways. 

Initiatives like the Smart Cities Mission targeting 100 cities aim to modernise urban planning and improve the living standards. The key advancements include 54 innovative technologies under the PMAY-U Technology Sub-Mission, with over 3,900 cities certified as ODF+ and 1,429 as ODF++ under SBM-U, and plans for 35 multimodal logistics parks costing USD 6.1 billion to handle 50 per cent of the freight movement. Since 2014, ₹18 lakh crore have been invested in urban transformation, while infrastructure projects such as MMLPs and schemes like Smart Cities Mission continue to bolster urban and economic growth. 

Financials
The Indian construction industry faced both opportunities for growth and challenges during the first half of FY25, influenced by economic, operational and policy-related factors. The overall consolidated operating revenue for all the mentioned categories under the construction industry reported approximately ₹1,15,038.23 crore in H1FY25, a decrease of 3.38 per cent from ₹1,19,062.98 crore in H1FY24. To provide a complete financial picture, we evaluated the major firms in each sub-sector, such as cement and building materials, ceramics, sanitary ware, glass, laminates and wood products. 

We compared their performance in H1FY25 to H1FY24. These firms have a total market capitalisation of ₹8,01,163.74 crore, of which Ultratech Cement owns 39.63 per cent. While the revenue of Ultratech Cement, a large cement maker, declined by 0.13 per cent, its profit after tax tumbled by 15 per cent in H1FY25 compared to H1FY24. Ambuja Cement and Shree Cement also control a sizeable share of the industry’s total market capital. 

In terms of industry operational efficiency, all the elements except two saw a contraction in profit margins in H1FY25 due to weak Q2 earnings. Looking at the percentage change in operating profit margins, only two out of 25 enterprises saw an increase. The revenue and net profit in the ceramics, sanitary ware, and glass and wood products’ industries increased in mixed proportions. Pokarna Limited outperformed outstandingly in terms of net profit growth, while Borosil Renewables had a major decline in net profit in H1FY25 compared to H1FY24. 

Outlook
United Nations projects India’s population to be 1.64 billion by 2047 and an estimated 51 per cent of India’s population is likely to be living in urban centres. One of the leading recipients of foreign direct investment (FDI) in the country is the construction (infrastructure) sector with inflows of USD 33.91 billion in the period April 2000 to March 2024. India’s construction sector is poised for significant growth, projected to become the third-largest globally by 2025, with an estimated value of USD 1.4 trillion. 

The Union Budget 2024-25 emphasises infrastructure development and housing, supported by initiatives like the Gati Shakti Plan and the National Infrastructure Pipeline (NIP). The roads and highways sector has expanded rapidly, with the construction of national highways growing 2.4 times over the past decade, reaching 1.46 lakh km in length. Major projects such as the Delhi-Mumbai Expressway (1,350 km) and other key corridors covering 5,467 km are underway. 

Investments in highways have increased six-fold to ₹3.1 lakh crore in FY24. Indian Railway’s future plans include developing 40,000 km of new tracks and achieving 100 per cent electrification of broad-gauge routes by 2024. The National Infrastructure Pipeline targets ₹111 trillion in investments by FY25, focusing on roads, railways, housing, renewable energy and irrigation. India’s economic development will surely benefit from the government’s efforts to boost the construction sector. 

Consumer Durables 
Increasing Choices, Rising Demand 

The Indian consumer durables market is a vibrant and rapidly growing sector, attracting global attention. It’s a diverse market, catering to a wide range of consumers from the middle-class to the affluent. This diversity presents immense opportunities for both domestic and international brands. The market is gradually shifting from unorganised to organised players. This trend, coupled with increasing consumer awareness of advanced technologies, is driving the demand for innovative products. To meet this demand, companies are investing in research and development, automation and Industry 4.0 technologies to improve efficiency and productivity. 

The government’s initiatives to promote domestic manufacturing and electronics exports are further boosting the sector. In the first quarter of 2024, electronics exports reached a significant milestone of USD 8.44 billion. With a strong growth trajectory, India aims to achieve a staggering USD 300 billion in electronics manufacturing and USD 120 billion in electronics exports by the fiscal year 2026. By 2025, India is poised to become the fifth-largest consumer electronics and appliances market globally. The industry is projected to almost double in size, reaching a value of approximately USD 17.93 billion. 

As the market continues to evolve, consumers can expect a wider range of high-quality, affordable products. For businesses, India offers a promising landscape for growth and innovation. Smart phones have emerged as a major export category for India, with a remarkable 42 per cent growth in FY24, reaching USD 15.6 billion. The overall electronics hardware production in the country stood at USD 87 billion in 2022. The Indian consumer electronics and home appliances market is set to grow steadily, with a projected increase of USD 2.3 billion between 2022 and 2027, at a CAGR of 1.31 per cent. 

The room air-conditioner market, specifically, is expected to reach a substantial value of `50,000 crore (USD 5.6 billion) by the fiscal year 2029. The reason is evident. There has been a rapid shift towards warmer and in fact hotter than normal climes, especially in the urban regions, and this has driven the demand for air-coolers and air-conditioners. The increase in commercial spaces has also triggered the need for air-conditioners in larger volumes. The significant growth in the consumer electronics and appliances industry presents a vast opportunity for businesses in both the manufacturing and retail segments. 

Financials
To study the financials, we have taken the top three companies in this sector and juxtaposed their performance in H1FY25 with H1FY24. Crompton Greaves Consumer Electricals with a 

market capitalisation of ₹26,169.75 crore reported a 10 per cent increase in net sales to ₹4,033.70 crore. Its profitability, as measured by PBIDT, improved by 21 per cent to ₹435.79 crore and PAT by 26 per cent to ₹280.42 crore. Whirlpool of India with a market capitalisation of ₹23,335.54 crore, saw an 18 per cent increase in net sales to ₹4,209.85 crore. 

The company’s PBIDT grew by 52 per cent to ₹297.95 crore and PAT by 73 per cent to ₹198.78 crore. PG Electroplast with a market capitalisation of ₹18,313.10 crore, reported a 75 per cent increase in net sales to ₹1,991.98 crore. Its PBIDT grew by 81 per cent to ₹187.03 crore and PAT by 126 per cent to ₹104.39 crore. All the three companies have shown strong financial performance, driven by increasing demand for domestic appliances in India. However, PG Electroplast stands out with its impressive growth rates in both net sales and profitability. 

Outlook
India’s consumer durables market is experiencing significant growth, particularly in the rural areas. Improved power supply in Tier III and IV towns and villages has opened up new opportunities for electrical product penetration. The television market is booming, with production expected to reach USD 10.22 billion by 2026. Headsets are also gaining popularity, driven by the increasing demand for wireless devices, with the market projected to reach USD 77 million by 2027 with a CAGR growth of 4.7 per cent. The dishwasher market, though limited, is showing promising growth in metros. 

It is expected to exceed USD 90 million by 2025-26. India’s ambitions extend beyond domestic consumption. The country aims to become a global manufacturing hub for electronics, with a target of USD 100 billion in laptop and tablet manufacturing by 2025. These developments indicate a bright future for India’s consumer durables industry. As the market continues to expand, consumers can expect a wider range of innovative and affordable products, while businesses can capitalise on the growing demand and government support to achieve substantial growth 

Financial Services 
A Wealthy Proposition 

India’s financial sector is diverse and rapidly expanding, driven by the strong growth of existing financial services firms and the emergence of new players. It encompasses asset management, housing finance, investments, non-banking finance companies, stock broking, term lending, insurance, and others. Recently, the banking regulator has introduced new entities like payment banks, adding to the sector’s diversity. The government has implemented various reforms to liberalise, regulate and strengthen the industry. 

Along with the Reserve Bank of India (RBI), it has taken steps to enhance financial access for micro, small and medium enterprises (MSMEs). Initiatives include the Credit Guarantee Fund Scheme for MSMEs, guidelines for reduced collateral requirements, and the establishment of the Micro Units Development and Refinance Agency (MUDRA). With concerted efforts from both the government and the private sector, India has become one of the world’s most dynamic capital markets. 

Financials From among the many segments this sector covers, stock broking has recorded the highest median sales growth, driven by factors such as increased financial literacy, growing retail investor participation, digital trading platforms, and robust equity markets. The ‘others’ category, comprising firms like Nuvama Wealth Management and Anand Rathi Wealth, followed with a strong median sales growth of 45 per cent. 

Additionally, asset management, investment companies and NBFCs reported median sales growth of 31 per cent, 29 per cent, and 23 per cent, respectively. 

Meanwhile, term lending, housing finance and insurance companies registered growth of 17 per cent, 16 per cent, and 9 per cent, respectively. EBITDA margin expansion was observed across most industries within the sector. Stock broking led with a margin increase of 421 basis points, followed by asset management (397 bps) and housing finance (231 bps). Conversely, NBFCs and insurance companies experienced EBITDA margin contractions, with insurance seeing the largest contraction of 456 basis points. 

Outlook
India’s financial services industry has witnessed significant growth in recent years, with this momentum expected to persist. The private wealth management sector demonstrates substantial potential, with India projected to have 16.57 lakh HNWIs by 2027, positioning it as the fourth-largest private wealth market globally by 2028. The insurance sector is also poised for expansion, with the market expected to reach USD 250 billion by 2025, presenting an opportunity of USD 78 billion in additional life insurance premiums between 2020 and 2030. 

India’s economy remains one of the world’s most dynamic, bolstered by its robust banking and insurance sectors. The relaxation of foreign investment rules has been well-received, leading to announcements from global insurers to increase stakes in joint ventures with Indian companies. This is likely to result in a wave of joint venture agreements in the coming quarters. The mutual fund industry is also targeting remarkable growth, with the Association of Mutual Funds in India (AMFI) aiming for assets under management (AUM) to reach ₹95 lakh crore and investor accounts to exceed 130 million by 2025. 

Additionally, India’s mobile wallet industry is projected to grow at a CAGR of 23.9 per cent between 2023 and 2027, reaching USD 5.7 trillion. Mutual fund investments continue to thrive, with equity inflows in October reaching ₹41,886 crore, a 22 per cent month-on-month increase, as per AMFI data. Debt Fund inflows turned positive at ₹1.57 lakh crore, compared to the previous month’s outflow of ₹1.13 lakh crore. All equity categories experienced inflows, with sectoral and thematic funds attracting the highest investment of ₹12,278 crore. Flexi-cap funds received ₹5,180 crore, Small-Cap funds ₹3,771 crore, and multi-cap funds ₹3,596 crore, reflecting sustained investor confidence across diverse segments. 

Fast-Moving Consumer Goods
Moving into the Slow Lane 

The Indian fast-moving consumer goods (FMCG) sector is a cornerstone of the country’s economy. The sector has witnessed a compound annual growth rate (CAGR) of 10-12 per cent in recent years, driven by strong consumer demand, urbanisation, rising incomes and increasing rural penetration. Valued at over USD 110 billion, the Indian FMCG sector is one of the country’s largest industries, contributing around 10 per cent to GDP and providing employment to over 3 million people. It accounts for 5 per cent of the total factory employment and plays a vital role in exports. 

Its key segments include food and beverages, personal care and household products. The FMCG sector has recently drawn renewed investor focus as retail inflation climbed to a 14-month high of 6.2 per cent in October, driven primarily by escalating food prices. The US Federal Reserve has cut rates by 75 basis points, but the Reserve Bank of India (RBI) has refrained, citing rising geopolitical tensions in the Middle East. The conflict has fuelled concerns over oil supply disruptions, driving up prices and heightening inflationary risks. 

RBI Governor Shaktikanta Das emphasised that rate cuts will depend on inflation aligning with the 4 per cent target. This stance has raised worries about a prolonged ‘higher for longer’ interest rate scenario in India. This scenario is hindering FMCG sector growth, with inflation and cost pressures curbing consumer demand. Traditionally a defensive choice during market downturns, the sector now faces hurdles, including subdued demand, slowing urban consumption, cost-driven pricing pressures, and heavy discounting to clear unsellable or near-expiry stock. 

Financials
For an in-depth analysis of the FMCG sector’s performance, we focused on BSE-listed FMCG companies within the top 1,000 by market capitalisation. The Q1FY25 results buoyed the H1FY25 numbers, as Q2FY25 performance proved disappointing. On an aggregate basis, FMCG companies recorded a 10 per cent revenue growth in H1FY25 compared to H1FY24, with industry leader ITC Ltd. driving this growth. ITC’s strong performance stemmed from its agri-business and hotels segments, while its paperboards, cigarettes and other FMCG segments posted modest single-digit growth. 

Lotus Chocolate Company stood out with triple-digit revenue growth, while household and personal products companies saw only marginal growth. Consumer food leaders like Britannia Industries and Marico Limited reported modest growth, whereas Mid-Cap and small-cap companies like BCL Industries, Devyani International and Jubilant FoodWorks achieved notable double-digit revenue rises. 

Profitability, however, grew only 5 per cent in H1FY25 compared to H1FY24 due to squeezed profit margins. Companies struggled to manage rising costs, as passing them on to consumers proved difficult amid high inflation and weakening demand. Consequently, most household and personal products companies reported profit declines, particularly for discretionary and premium items. Conversely, edible oil companies experienced robust growth, reflecting the sector’s varied performance amidst challenging market conditions. 

Outlook
The FMCG sector has recently faced multiple challenges, including rising input costs and food inflation, forcing companies to reassess their pricing strategies. The entry-level price points of ₹5 and ₹10 for ‘mini packs’ are under pressure, leading many firms to consider reducing grammage to remain competitive. Sharp increases in commodity prices, such as palm oil, coffee and cocoa, have compounded the issue, prompting leading FMCG players to hike prices post-Diwali, with further increases on the anvil. While urban consumption has slowed, rural demand has shown resilience, growing at 6 per cent compared to urban growth of 2.8 per cent. 

This disparity underscores the strength of rural markets, bolstered by the expanding reach of e-commerce and quick commerce platforms, which are enabling FMCG companies to penetrate deeper into Tier II and III cities. Government initiatives aimed at rural development and rising disposable incomes further support this growth. Additionally, a consumer shift towards health-conscious and premium products is fostering innovation and creating new market opportunities. 

Experts had initially expected robust Q3FY25 results, fuelled by festive season sales. However, a cautious Q3 business outlook from industry leader Godrej Consumer raised concerns about a potential industry-wide demand slowdown, driven by rising input costs. To mitigate cost increases, companies have implemented price hikes and reduced the grammage of key packs, which may, however, dampen future demand. The upcoming inflation data and the RBI’s stance on interest rate cuts will play a crucial role in determining the FMCG sector’s outlook. 

Healthcare
Getting Fitter by the Day 

The healthcare industry includes hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance, medical equipment, and pharmaceuticals. In the current economic scenario, India's healthcare sector is growing rapidly due to increased investments from the government and private companies, better access to healthcare services, and higher spending on health. 

As of 2024, India's healthcare industry has become one of the country’s largest employers, providing jobs to 7.5 million people. Advancements in telemedicine, virtual assistants, and data analytics are expected to generate 2.7-3.5 million new tech jobs in the sector. India's hospital market is expected to grow at an annual rate of 8 per cent from 2024 to 2032, reaching around USD 193.59 billion by 2032. The telemedicine market is expected to reach USD 5.4 billion by 2025, fueled by the growing need for remote healthcare and technological advancements. As of February 2024, health insurance companies in India have underwritten premiums totalling `2.63 lakh crore (USD 31.84 billion). 

Financials
We compared the performance of companies in this sector 

between the first half of FY25 and FY24. Overall, the sector showed strong performance in areas like sales, profit before interest, depreciation, and tax (PBIDT), as well as profit after tax (PAT). 

The healthcare sector's total revenue grew by 8.12 per cent, rising from ₹2,07,526.69 crore in H1FY24 to ₹2,24,374.70 crore in H1FY25. Similarly, PBIDT saw a strong increase of around 18 per cent, growing from ₹44,291.39 crore in H1FY24 to ₹52,094.99 crore in H1FY25. The sector’s profit after tax (PAT) also rose significantly by 33 per cent, from ₹24,955.29 crore in H1FY24 to ₹33,231.87 crore in H1FY25. Overall, the results for H1FY25 were strong. 

In H1FY25, the top companies in the Hospitals and Pharmaceuticals sectors based on market capitalisation are - Sun Pharmaceutical Industries Ltd, Divi's Laboratories Ltd, Cipla Ltd, Apollo Hospitals Enterprise Ltd, and Max Healthcare Institute Ltd. All these companies have shown positive sales growth. Among these, Divi's Laboratories Ltd and Apollo Hospitals Enterprise Ltd saw significant improvements in both their top line and bottom line. However, Max Healthcare Institute Ltd had the highest operating margins compared to the other top companies. 

Outlook
The health segment accounts for 33.33 per cent of the total gross premiums written in India. The health-tech sector is expected to grow significantly, with a 15-20 per cent increase in hiring in 2024 due to rising demand for innovative healthcare solutions and the growing use of technology in medical services. 

The healthcare industry has seen major changes in recent years, thanks to medical and technological advancements. These developments have improved treatment options, data collection, and disease research, giving patients more choices. Hospitals in India are increasingly investing in technology to enhance patient care, with progress in areas like robotic surgeries, radiation therapy, and transplant support systems. 

New health technologies like wearable devices, telemedicine, genomics, virtual reality (VR), robotics, and AI-powered chatbots are transforming healthcare in India. The digital health sector is growing quickly as healthcare companies adopt these technologies to improve patient care, boost efficiency, and manage supply chains better. These innovations are helping address the global shortage of healthcare professionals and are changing how healthcare is delivered worldwide, including in India. 

Health insurance payers accounted for 33 per cent of total revenue this quarter, with a 23 per cent year-on-year (YoY) growth and a 12 per cent quarter-on-quarter (QoQ) growth. However, insurance coverage is still low, which means there is a lot of room for growth as awareness of health insurance increases and people’s purchasing power improves Pharmaceuticals are also expected to perform well in the coming years, with a strong pipeline in promising areas such as biosimilars, GLP-1, and peptides over the next two to three years. Companies that have a larger focus on chronic disease treatments are expected to continue outperforming the Indian Pharmaceutical Market (IPM), showing better growth compared to others in the sector. 

Hospitality
Bags Packed and Ready to Go 

I ndia’s hospitality sector is a rapidly growing market with a significant impact on the economy and tourism. The industry offers a unique blend of traditional living and modern advancements, providing a wide range of accommodations from grand palaces and world-class hotels to budget inns, boutique hotels, yoga ashrams and homestays. The market size of India’s hospitality industry is projected to reach USD 24.61 billion in 2024 and is expected to grow to USD 31.01 billion by 2029, at a CAGR of 4.73 per cent during the forecasted period of 2024-29. India allows 100 per cent foreign direct investment (FDI) in the hotel and tourism sector through the automatic route. 

Over the last four fiscal years (2020-2023), the sector has attracted over 25 per cent of the total FDI, amounting to USD 4.36 billion. This foreign investment is a key driver of the industry’s growth, supporting its expansion and global competitiveness. This growth is further fuelled by a mix of domestic and international players, operating across both the organised and unorganised segments. The sector’s diversity and the increasing interest of people to engage in tourism contribute significantly to its continued success and global recognition. Additionally, the ease of planning travel packages has further sparked interest among potential tourists. 

Financials
The Indian hospitality sector recorded an average sales growth of 11.64 per cent in H1FY25. Among the key players, Samhi Hotels led with a remarkable growth of 26 per cent, followed by Lemon Tree Hotels and Juniper Hotels, both achieving 24 per cent growth. The sector’s median sales growth stood at 9 per cent, indicating steady performance across the board. The sector experienced notable variations in PBIDT growth during H1FY25. 

The average growth was 10.55 per cent, driven by extremes like Samhi Hotels with an 88 per cent increase and India Tourism Development Corporation (ITDC) with a –40 per cent decline. However, the median growth stood at 4 per cent, highlighting a more grounded sector-wide trend. Of the 11 companies analysed, 27 per cent reported negative PBIDT growth, showcasing a mixed financial performance across the industry. PAT growth in H1FY25 showed a wide range of performance. 

Indian Hotels Company led the sector with an impressive 118 per cent growth, followed by Samhi Hotels at 110 per cent. The average PAT growth across the sector stood at 9.27 per cent 

while the median growth was 8 per cent. On the lower end, Chalet Hotels, Lemon Tree Hotels and Apeejay Surrendra Park Hotels posted single-digit growth, reflecting subdued performance. Additionally, over 36 per cent of the companies in the sector reported negative PAT growth, indicating uneven recovery within the industry. 

Outlook
India’s hotel sector is on a growth trajectory, with revenues forecasted to rise by 7-9 per cent in FY25, following strong growth of 14-16 per cent in FY24. Premium hotel occupancy rates are set to reach 72-74 per cent in FY25, marking a decade-high, up from 68-70 per cent in FY23. 

Average room rates (ARR) for premium hotels are expected to climb to `7,800-8,000 in FY25 compared to `7,200-7,400 in FY24. Similarly, the revenue per available room is anticipated to close in on the record levels last seen in FY08. 

Hotel room supply is projected to grow at 4.5-5 per cent annually in the coming years, but demand is likely to grow faster, creating a favourable environment for the industry. Driving this growth are factors like an increase in domestic travel, a booming wedding season with 48 lakh weddings expected this year, and a resurgence in business travel and events such as conferences and exhibitions. Additionally, the aviation sector’s growth, with a record 5 lakh domestic passengers in a single day, is boosting hotel demand. 

The branded hotel segment is seeing rapid expansion, with 33,407 new rooms added across 333 projects by October 2024, a 45 per cent year-on-year growth. Smaller cities, including Tier II, III and IV towns, accounted for over 75 per cent of these additions, highlighting emerging opportunities in these markets. Though occasional challenges in occupancy persist, rising room rates, increased investments and a focus on untapped regions indicate strong potential for the Indian hospitality sector in the years ahead. 

Information Technology
Boosting Indian Economy 

The Indian information technology (IT) and financial technology (fintech) sectors stand as pillars of the country’s economic growth and innovation. While the IT sector has faced challenges in FY24, with growth slowing to 3.8 per cent compared to 8.4 per cent in the previous year, it continues to demonstrate resilience. The global technology spending downturn and sharp decline in incremental revenues have pressured the industry, yet optimism persists for FY25, as 66 per cent of CEOs anticipate increased client budgets. 

Strategic focus on areas like engineering research and development, global capability centres (GCCs) and artificial intelligence (AI) highlights the sector’s adaptive strategies. The domestic IT market has shown robust growth, outpacing exports, while government investments in digital infrastructure and emerging technologies provide a strong foundation for sustained progress. On a parallel note, the Indian fintech sector has emerged as a transformative force in democratising financial services. 

Valued at USD 110 billion in 2024, it is projected to grow to USD 420 billion by 2029, achieving a remarkable 31 per cent annual growth rate, according to the Non- Executive Chairman of National Payment Corporation of India. Together, these sectors are driving innovation, creating opportunities and reinforcing India’s position as a global leader in technology and financial services. 

Financials
As of December 2024, the Indian IT sector boasted a market capitalisation of ₹43.08 lakh crore, with Tata Consultancy Services Ltd (TCS) and Infosys Ltd leading the pack. TCS contributed 35.67 per cent, thus showcasing steady growth across net sales, PBIDT and PAT, and reflecting its resilience and leadership. Infosys, though exhibiting slower growth, remained stable in its financial performance. Large-Cap stocks demonstrated mixed performances, with Wipro Ltd experiencing 2 per cent decline in net sales; however its PAT grown in double digit. 

Oracle Financial Services Software Ltd delivered robust results, with a 17 per cent sales growth, 34 per cent growth in PBIDT and a 30 per cent rise in PAT. Tech Mahindra Ltd reported an extraordinary 75 per cent jump in PAT and 47 per cent growth in PBIDT, despite nearly flat sales growth at 1 per cent. Mid-sized IT players outperformed with consistent doubledigit growth in sales. Notable among them, Zen Technologies Ltd posted triple-digit growth in both sales and profit, marking a standout performance. 

Other mid-tier companies like Persistent Systems, Coforge, KPIT Technologies, Sonata Software, Newgen Software and Happiest Minds also delivered strong results, reinforcing the sector’s potential beyond large caps. The small-cap firms also witnessed solid growth, with Blue Cloud Softech Solutions reporting triple digit net sales growth and Genesys International Corporation reporting 89% net sales growth and jump of 284% in PAT. However, not all benefited equally, as 11 mid and small-cap companies, including Tata Technolgies, Cyient and Zensar Technologies, saw PAT declines despite sales growth. 

In the fintech segment, most players, including PB Fintech, Infibeam Avenues and Zaggle Prepaid Ocean Services, achieved double-digit growth in sales and profits, underscoring the growing relevance of digital financial solutions. However, One 97 Communications reported a sharp decline of 35 per cent in sales and a 113 per cent drop in net profit, highlighting challenges within the segment. 

Outlook
The Indian IT and fintech sectors are poised for robust growth, supported by government initiatives, technological advancements, and increasing global competitiveness. The IT sector, a significant contributor to India’s GDP, is expected to double its revenue to USD 500 billion by 2030. In 2024-25, the Union Budget allocated `1.16 lakh crore (USD 13.98 billion) to IT and telecom, emphasising cyber security, AI and digital infrastructure. India remains the top off-shoring destination for IT services, driven by cost advantages and a technologysavvy workforce. 

Emerging technologies like generative AI and cloud computing are shaping the future, with generative AI projected to account for 60 per cent of hyperscalers’ server spending. By 2026, cloud adoption could generate 14 million jobs and add USD 380 billion to the GDP. The fintech sector, valued at USD 110 billion in 2024, is projected to grow to USD 420 billion by 2029 at a CAGR of 31 per cent. Government policies, including the removal of Angel Tax, indicate a positive development of start-ups within the sector. 

The sector has attracted USD 31 billion in investments over the last decade, expanding financial services and curbing the parallel economy. Fintech innovation has enhanced financial product delivery and efficiency, with strong growth in areas like digital payments and lending. Despite global economic challenges, India’s focus on cost optimisation, customer experience transformation and strategic initiatives ensures a positive outlook for IT and fintech. These sectors are integral to India’s digital transformation, aligning with the government’s vision of a USD 5 trillion economy. 

Infrastructure
A Progressive Path Ahead 

I nfrastructure is a major sector that propels the overall development of the Indian economy. The Secretariat for Infrastructure in the Planning Commission is involved in initiating policies that would ensure the time-bound creation of world-class infrastructure in the country. This section focuses on power, bridges, dams, roads and urban infrastructure development. India has to enhance its infrastructure to reach its 2025 economic growth target of USD 5 trillion. India’s population growth and economic development require improved transport infrastructure, including investments in roads, railways, and aviation, shipping and inland waterways. 

As per a report of Morgan Stanley, India’s infrastructure investment is to steadily increase from 5.3 per cent of the GDP in FY24 to 6.5 per cent of the GDP by FY29. According to CRISIL’s Infrastructure Yearbook 2023, India will spend nearly ₹143 lakh crore (USD 1,727.05 billion) on infrastructure in seven fiscals through 2030, more than twice the nearly ₹67 lakh crore (USD 912.81 billion) spent in the previous seven years. The performance of eight core infrastructure industries, namely, coal, electricity, steel, cement, fertilisers, refinery products and natural gas increased in January 2024. The combined index of eight core industries increased by 6.2 per cent (provisional) YoY in April 2024 compared to April 2023. 

Financials
Larsen and Toubro, a market leader, has solidified its position as a market leader with the largest market capitalisation. As a multinational conglomerate, it specialises in providing engineering, procurement and construction (EPC) solutions across diverse sectors, including infrastructure, hydrocarbon, power, process industries, defence, information technology and financial services, catering to both the domestic and international markets. 

In the first half of FY25, the company reported a robust 17.96 per cent increase in its top-line, reaching ₹1,16,674.40 crore with an 8.34 per cent surge in the bottom-line, totalling ₹7,552.92 crore in comparison to the same period in FY24. Following closely in the market is Rail Vikas Nigam Ltd (RVNL), functioning as an extended arm of the Ministry of Railways. RVNL serves as an umbrella SPV (special purpose vehicle), undertaking project development and resource mobilisation. In H1FY25, RVNL reported a 14.85 per cent decline in net sales, dropping to ₹8,928.75crore. 

The players in the infrastructure sector experienced a mixed performance. IRCON International faced challenges, with a 10.84 per cent decline in net profit, amounting to ₹370.33 crore in H1FY25. Similarly, Hindustan Construction Company witnessed a 26.71 per cent decrease in revenue, totalling ₹3,222.86 crore. Overall, the performance of various companies displayed bullish trends, but some players encountered challenges in the market dynamics. 

Outlook
Under Interim Budget 2024-25, capital investment outlay for infrastructure has been increased by 11.1 per cent to ₹11.11 lakh crore (USD 133.86 billion), which would be 3.4 per cent of the GDP. India’s infrastructure sector is witnessing significant growth, driven by a 37 per cent increase in capital expenditures in the current fiscal year. This growth supports infrastructure development and aligns with India’s target of becoming a USD 5 trillion economy by 2027. The budget focuses on roads, shipping and railways to boost private investments and address rural employment and consumption. 

Global collaborations, such as the India-Japan Forum for Northeast Development, signal enhanced foreign investments. Over the next 15 years, India needs to invest USD 840 billion in urban infrastructure to cater to its growing population. Sustainability and maintenance of infrastructure like buildings, bridges, ports, and airports will be crucial for long-term growth. Commercial real estate in Tier II and III cities has grown significantly as IT, BFSI and other sectors decentralise operations. Residential real estate has also seen improvement, with over 360,000 units sold in the top seven cities in 2022. 

The Civil Aviation Ministry’s Vision 2040 outlines a plan for 190-200 operational airports by 2040. Delhi and Mumbai will each have three international airports, while 31 cities will have two airports. The UDAN initiative aims to complete 220 destinations and 1,000 routes by 2026 to connect underserved areas. Urbanisation, foreign investments and the mission of smart cities are driving rapid growth. India’s GDP is projected to grow at 8 per cent annually over the next three years, among the fastest globally. Collaborations with nations like Japan will further strengthen infrastructure, ensuring a promising future for the sector. 

Logistics
Smooth Road Ahead 

India’s logistics sector is undergoing a significant transformation. The Indian logistics market, valued at USD 107.16 billion (₹9 trillion) in FY23, is projected to grow significantly, reaching USD 159.54 billion (₹13.4 trillion) by FY28, with a compounded annual growth rate (CAGR) of 8-9 per cent. This growth is driven by structural shifts, technological advancements, and government initiatives focused on reducing logistics costs and improving the infrastructure. The National Logistics Policy, unveiled in September 2022, aims to optimise India’s logistics landscape. 

This will be done by increasing the share of railways in freight movement, currently at 18 per cent, through developing dedicated freight corridors (DFCs), enhancing road infrastructure, and expanding inland waterways. As of April 2024, DFCs are 96 per cent complete, which is expected to enhance the capacity and efficiency of rail freight and improve its share in the overall modal mix. Additionally, the government’s push for port privatisation has improved infrastructure and efficiency at Indian ports. 

This has benefited major operators such as Adani Ports and Special Economic Zone (APSEZ) and JSW Infrastructure. India’s logistics costs as a percentage of GDP stand at 14 per cent, significantly higher than the 8-9 per cent range observed in developed countries. This is largely attributed to the skewed modal mix, where roads account for 71 per cent of freight movement, leaving railways and waterways with a smaller share. To address these inefficiencies, the government has implemented key initiatives like the Goods and Services Tax (GST) and invested heavily in road infrastructure, inland waterways and DFCs. 

These measures are anticipated to reduce the logistics cost-toGDP ratio to 8-9 per cent in the coming years, aligning India with global standards. The highly diverse logistics market encompasses road transport, rail transport, air cargo, multimodal logistics and industrial warehousing. The domestic express logistics segment is projected to grow faster, with a 14 per cent CAGR from FY23 to FY28, driven primarily by the expansion of e-commerce. Organised players currently control about 80 per cent of the market. 

Financials
We have taken the top three companies in this sector and juxtaposed their performance in H1FY25 with H1FY24. Container Corporation of India, with a market capitalisation of ₹50,053.53 crore, reported a 7 per cent increase in net sales to ₹4,390.88 crore in H1FY25. Its profitability, as measured by PBIDT, improved by 9 per cent to ₹1,023.65 crore, and net profit grew by 4 per cent to ₹631.49 crore. This translates to a PBIDT margin of 23.31 per cent in H1FY25, slightly p from 22.88 per cent in H1FY24. Aegis Logistics, valued at ₹30,647.56 crore, saw a marginal increase in net sales to ₹3,351.76 crore. Its PBIDT grew by 13 per cent to ₹456.27 crore, and net profit increased by 10 per cent to ₹310.08 crore. 

The company witnessed growth in both top-line and bottom-line and its PBIDT margin increased slightly from 12.12 per cent in H1FY24 to 13.61 per cent in H1FY25. Transport Corporation of India (TCI), with a market capitalisation of ₹8,172.50 crore, reported an 11 per cent increase in net sales to ₹2,165.90 crore. Its PBIDT grew by 10 per cent to ₹220.9 crore, and net profit increased by 15 per cent to 153.6 crore. This translates to a PBIDT margin of 10.2 per cent in H1FY25, slightly down from 10.35 per cent in H1FY24. 

Outlook The Indian logistics sector is a vital cog in the country’s economic engine, facilitating the efficient movement of goods and services. While it currently contributes around 13-14 per cent to India’s GDP, its potential for growth is immense. As the economy expands, the demand for efficient logistics solutions will soar. Government initiatives like the National Logistics Policy, dedicated freight corridors, multi-modal logistics parks and digitisation efforts are driving significant transformation. These measures aim to reduce logistics costs, improve efficiency, and enhance India’s competitiveness in the global market. 

The organised logistics sector is poised for rapid growth, driven by factors such as increasing e-commerce, rising consumer demand and government support. Organised players are well-positioned to capitalise on these trends by offering integrated services, leveraging technology, and building strong customer relationships. The future of India’s logistics sector is bright. With continued government support, technological advancements and increasing investments, the sector is set to play a crucial role in shaping India’s economic future, triggered no doubt by the increasing need for timebound deliveries. 

Media & Entertainment
More Visibility, More Revenue 

The Indian media and entertainment industry is on a strong growth trajectory, expected to expand much faster than the global average. This rapid growth is largely driven by rising incomes, increasing internet access, and a growing shift toward digital technologies. In the long term, the media and entertainment industry is expected to see significant growth in retail advertising. This will be fuelled by more players entering the food and beverage sector, the rising popularity of e-commerce, and domestic companies exploring new opportunities. 

India’s rural areas are poised to become key growth markets. With the country already embracing 5G and making early preparations for 6G, digital adoption in rural regions will create vast opportunities for advertisers and content publishers. This expansion into untapped markets is expected to further drive the growth of India’s media and entertainment sector. The digital media sector is expected to continue growing at a rate of 13.5 per cent annually through 2026. 

It is expected to reach ₹955 billion, supported by better digital infrastructure, changing consumption habits, and increased content availability. Digital advertising will continue to gain a larger share of the overall media and entertainment advertising market, with a projected 13.5 per cent annual growth, reaching ₹842 billion by 2026. This will account for 57 per cent of the total advertising market, up from 51 per cent in 2023. 

E-commerce’s share of digital advertising revenue is expected to grow from 15 per cent in 2023 to 18 per cent in 2026, while search and social media’s share will decrease from 72 per cent to 70 per cent during the same period. Digital subscription revenue is forecasted to grow at a rate of 13.5 per cent annually, reaching ₹114 billion by 2026. Paid video subscriptions are expected to reach 138 million, covering 65 million subscribing households, and audio OTT subscriptions will double to 15 million by 2026. 

Financials
Despite a high base in Q2FY24, industry-wide box office (BO) collections fell 19.7 per cent year-on-year (YoY) to approximately ₹26.3 billion. However, the BO showed a strong recovery compared to the previous two quarters, driven by hits like ‘Stree 2’ and successful regional films such as ‘GOAT’, ‘Devara 1’, ‘Indian 2’ and ‘Raayan’. Consequently, PVR-Inox is expected to report 38.7 million footfalls and a pre-IND AS 

EBITDA margin of 10.6 per cent. In broadcasting, ZEEL’s performance is likely to remain under pressure due to a weak advertising environment. 

However, ongoing cost-cutting measures in content, technology, marketing and manpower are expected to maintain EBITDA margins at the Q1FY25 levels. Despite challenges in Kiddopia, real money gaming and advertising technology, Nazara Technologies’ revenue is expected to grow by 6.6 per cent year-on-year to `3,169 million in Q2FY25, driven by the consolidation of Freaks 4U and Fusebox Games. 

Outlook
India’s media and entertainment sector is projected to grow further at a 10 per cent annual rate, reaching ₹3.08 trillion (USD 37.2 billion) by 2026. Advertising revenue alone is expected to reach ₹330 billion (USD 3.98 billion) by 2024. In 2023, traditional media like TV, print, movies, outdoor advertising, music and radio made up 57 per cent of the industry’s total revenue. In 2023, subscription revenues from over-the-top (OTT) video platforms in India were around USD 0.88 billion and are expected to exceed USD 1.2 billion by 2026. 

According to Media Partners Asia, India’s video market, which includes both TV and digital platforms, is projected to grow from USD 13 billion in 2023 to USD 17 billion by 2028. EY-FICCI expects television advertising revenue to grow at a steady annual rate of 3.6 per cent, reaching ₹330 billion by FY 2026-27. This growth is driven by key factors like elections and increased investments in sports programming. 

Regional channels also play a crucial role, as advertisers continue to prefer local language content, keeping the advertising rates stable. Additionally, television remains a preferred platform for large Indian companies expanding their brands and for international brands entering the market, thanks to its wide reach. As India moves closer to becoming one of the top three global economies, TV advertising will remain essential for building brand visibility and connecting with diverse audiences. 

Iron, Steel & Mining
Gaining in Strength 

The steel sector has always been a critical driver of industrial progress, forming the backbone of economic development worldwide. In India, steel production and consumption are key indicators of industrial health, with the country firmly positioned as the world’s second-largest producer of crude steel. In FY24, India achieved an output of 143.6 million tonnes (MT) of crude steel and 138.5 MT of finished steel, underscoring its industrial prowess. The domestic demand for steel is projected to grow by 9-10 per cent in FY25, buoyed by abundant raw materials such as iron ore, cost-effective labour and expanding sectors like construction, infrastructure and manufacturing. 

The sector, marked by state-of-the-art mills and continuous modernisation, is poised to significantly contribute to India’s overall manufacturing output and economic growth. The mining sector complements the steel industry by ensuring a steady supply of essential raw materials. India, endowed with vast resources of metallic and non-metallic minerals, is largely self-reliant in critical minerals such as bauxite, iron ore and 

coal. This forms the bedrock of growth for end-use industries, including construction, automotive and power. In FY24, India achieved coal production of 997.25 MT and a record iron ore production of 277 MT, highlighting the sector’s robust output. 

Financials
The steel sector displayed mixed results in its recent financial performance. Tata Steel reported a remarkable 127.68 per cent increase in profit after tax (PAT), demonstrating strong operational efficiency. In contrast, JSW Steel faced PAT decline of 74.42 per cent, reflecting sectoral challenges. Meanwhile, Steel Authority of India Limited (SAIL), one of India’s largest steel producers, delivered significant growth, with PBIDT rising by 81.19 per cent and PBIDTM surging by 417.63 per cent, reaffirming its position as a market leader. SAIL currently has market capitalisation of ₹48,038.01 crore. 

The contrasting fortunes of major steel players like JSW Steel, Tata Steel and SAIL provide a nuanced perspective on the industry dynamics. As the sector navigates through diverse challenges and opportunities, Tata Steel remains a standout performer. In the mining sector, Sandur Manganese and Iron Ores Ltd. emerged as a standout performer. The third-largest manganese ore mining company in India, it also manufactures ferroalloys like silico-manganese and ferro-manganese. 

Sandur Manganese and Iron Ores Ltd. achieved an impressive 57.47 per cent growth in revenue and a staggering 169.1 per cent rise in PAT, reaching ₹178.89 crore in H1FY25. This robust performance underscores its dominance in mining lowphosphorous manganese and iron ore. Coal India reported a sales drop of 2.36 per cent but has delivered 15.71 per cent growth in its profit after tax. The company currently has market capitalisation of ₹2,56,030.55 crore. Overall, the mining sector exhibited strong profitability, with all the large players recording significant improvements in PBIDT and PAT metrics. 

However, some firms, like Ashapura Minechem and Deccan Gold Mines, faced challenges with declining net sales and PAT. Despite these variations, the sector’s overall performance has been good, thus highlighting its crucial role in driving industrial growth and providing the foundation for India’s expanding economy. As mining supports industrialisation and economic growth, its potential to boost GDP, foreign exchange earnings and industrial competitiveness remains unmatched. So is the case with the steel sector which can look forward to tapping more growth potential with the proliferation of metros and the government’s mission of developing smart cities. 

Outlook
In FY24, India’s steel sector continued its robust growth trajectory, with crude steel production reaching an impressive 143.6 million metric tonnes (MT), marking a 12.9 per cent increase year-on-year. Finished steel production stood at 138.5 MT, up by 12.4 per cent, while exports of finished steel climbed to 7.5 MT, a growth of 11.5 per cent. Per capita steel consumption in FY23 was 86.7 kg, underscoring its critical role in infrastructure and industrial applications. The April-June 2024 quarter maintained this momentum, with crude steel production at 36.6 MT, finished steel production at 35.8 MT and consumption at 35.4 MT. 

India’s steel sector is on course to surpass 300 MT in annual production by 2030-31, with anticipated crude steel output of 255 MT, finished steel at 230 MT and per capita consumption projected to rise to 160 kg, driven by ambitious infrastructure and manufacturing expansions. The mining sector, integral to steel production, also recorded stellar performance. India’s coal production surged by 12 per cent in FY24 to 997.25 MT, and iron ore production reached a record 277 MT, a 7.4 per cent year-on-year growth. 

The mining GDP rose to `82,680 crore (USD 9.95 billion) in Q3FY24, reflecting the sector’s robust contribution to the economy. The government’s Production-Linked Incentive (PLI) scheme is set to attract significant investments in specialty steel, with `16,000 crore (USD 1.9 billion) expected by the end of FY 2024. As India gears up to become the world’s third-largest construction market by 2025, bolstered by housing and infrastructure development, the iron, steel and mining sectors are poised to play a transformative role in driving economic growth and self-reliance, cementing their position as pivotal contributors to India’s global aspirations. 

Oil & Gas
Flowing Demand to Perk Profitability 

India’s refining capacity has grown from 215.1 million metric tonnes per annum (MMTPA) to 256.8 MMTPA over the past decade, reflecting its significant role in the global energy market. By 2028, this capacity is projected to rise to 309.5 MMTPA, positioning India as a refining hub in Asia. India is a key contributor to global non-OECD petroleum consumption growth. 

Petroleum product consumption increased from 158.4 million metric tonnes (MMT) in FY 2013-14 to 234.3 MMT in FY 2023-24, driven by robust economic and industrial activity. High-speed diesel continues to dominate as the most consumed petroleum product, accounting for 38.6 per cent of total consumption in FY 2023. Petroleum product usage rose to 

approximately 4.44 million barrels per day (BPD) in FY 2023, compared to 4.05 million BPD in FY 2022. Crude oil production during April–October 2023 stood at 2.69 million BPD, underscoring India’s increasing focus on energy selfreliance. 

India’s LNG imports totalled 30,917 million metric tonnes (MMSCM) between April 2023 and March 2024. The International Energy Agency (IEA) projects India’s natural gas consumption to grow by 25 billion cubic metres (BCM), achieving an average annual growth of 9 per cent until 2024. The shift toward cleaner energy sources and a focus on sustainability is accelerating this trend, as alternative fuel sources gain viability. 

Financials
Among major players, in Oil Exploration, ONGC is the largest, followed by Oil India and Deep Industries. An analysis of six companies shows a 5.1 per cent increase in net sales for H1FY25 compared to H1FY24. However, this growth did not translate into profitability, reflecting challenges posed by the sector. The PBIDT (profit before interest, depreciation and tax) declined by 25 per cent in H1FY25 compared to H1FY24, with collective margins falling by 71 basis points. 

The profit after tax (PAT) dropped by 32 per cent over the same period, highlighting margin pressures due to rising input costs. Deep Industries led the growth curve, with net sales rising by 25 per cent, PBIDT increasing by 33 per cent, and PAT growing by 33 per cent for the half year. Conversely, Hindustan Oil Exploration Company faced the steepest declines, with net sales dropping by 18 per cent and PAT falling by 52 per cent in H1FY25 compared to H1FY24. 

Outlook
India’s rapid economic growth is driving higher production and transportation needs, significantly increasing oil demand. Crude oil consumption is expected to grow at a CAGR of 4.59 per cent, reaching 500 million tonnes by FY 2040, up from 223 million tonnes in FY 2023. Diesel demand in India is expected to double to 163 million tonnes by 2029-30, with diesel and petrol making up 58 per cent of oil demand by 2045. While the rise of electric vehicles may influence long-term demand, robust industrial activity and transportation needs will continue to drive consumption. Natural gas consumption is forecasted to grow at a CAGR of 12.2 per cent, reaching 550 million cubic meters per day (MCMPD) by 2030, up from 174 MCMPD in 2021. Expanding LNG infrastructure will support this growth. 

Indian refiners plan to add 56 million tonnes per annum (MTPA) of capacity by 2028, raising domestic capacity to 310 MTPA. By 2030, India aims to double refining capacity to 450-500 million tonnes, making it a global refining leader. India’s energy demand is projected to grow faster than any major economy, supported by robust GDP growth and urbanisation. The country’s share in global primary energy consumption is expected to double by 2035, solidifying its role as a strategic energy player. 

Plastic Products
All Set to Scale Up 

The Indian plastic industry is a leading contributor to the country’s economy. The history of the industry dates back to 1957 with the production of polystyrene. Since then, the sector has made remarkable progress and experienced rapid growth. With a presence spanning the entire country, the industry has more than 2,500 exporters. The industry currently supports approximately 50,000 enterprises, of which 85-90 per cent comprises micro, small and mediumsized enterprises (MSMEs). 

These generate a contribution of ₹3.5 lakh crore (USD 42.89 billion) to the Indian economy and provide employment to over 4 million individuals. India’s recycling rate for plastic stands at 60 per cent, significantly higher than that of developed nations, establishing India as a key global hub for plastic manufacturing. This position is driven by low-cost production, affordable labour and abundant, accessible raw materials. Additionally, India exports plastic products to over 200 countries worldwide. 

In recent years, the plastic products industry has been pioneering technological advancements, fostering a spirit of innovation across the country. The sector has also contributed to enhancing value in diverse manufacturing sectors, such as agriculture and fast-moving consumer goods (FMCG). India’s manufacturing portfolio includes a broad range of products, such as house ware, medical items, packaging materials, films, pipes, containers and home plastic furniture. Also, with increasing dependence on plastic containers for storage in homes, the industry can look forward to greater potential for growth. 

Financials
To assess the sector’s financial performance, we compared the top 17 companies’ performance between H1FY25 and H1FY24. The sector demonstrated notable growth across parameters like sales, profit before interest, depreciation and tax (PBIDT) and profit after tax (PAT). The aggregate revenue of the sector increased 7.8 per cent, rising from ₹27,247.94 crore in H1FY24 to ₹29,385.43 crore in H1FY25. The PBIDT recorded a sharp improvement, growing 16.1 per cent from ₹3,299.11 crore in H1FY24 to ₹3,829.13 crore in H1FY25. 

The sector’s PAT surged significantly by 57.2 per cent, climbing from ₹1,654.34 crore in H1FY24 to ₹2,601.35 crore in H1FY25. Among the top five companies in the sector based on market capitalisation, namely, Supreme Industries, Astral Limited, Garware Hi-Tech Films, Finolex Industries and Time Technoplast Limited, diverse performance trends were noted in sales growth. 

These companies recorded sales growth rates of 5 per cent, 4 per cent, 41 per cent and 14.4 per cent, respectively, while 

Finolex Industries experienced a decline of 4.5 per cent. Out of the five companies, only Astral Limited reported a negative YoY growth in PAT, while the remaining companies demonstrated growth in profits. Supreme Industries, Finolex Industries, Garware Hi-Tech Films and Time Technoplast posted PAT growth rates of 0.3 per cent, 173.8 per cent, 115.0 per cent and 40 per cent, respectively. 

Outlook
The Government of India has ambitious plans to transform the domestic plastic industry, aiming to scale its economic value from ₹3 lakh crore (USD 37.8 billion) to ₹10 lakh crore (USD 126 billion) over the next four to five years. This push underscores the sector’s critical role in driving economic growth and creating employment. In FY24, the country’s plastic exports touched USD 11.55 billion, a 3.5 per cent decrease compared to the previous fiscal year. India exports plastics to over 200 countries, with the USA, Germany, Japan, the UK and France emerging as top destinations for consumer and house ware products. 

The USA, India’s largest plastic export market, contributed USD 2.31 billion (19.37 per cent of the total exports) in FY23. China follows as the second-largest importer, accounting for USD 690.95 million (5.78 per cent of the total exports). In FY25 (until June 2024), India’s total plastic exports stood at USD 2.93 billion, marking a 5.4 per cent YoY growth. Key product categories like plastic films and sheets, woven sacks and flexible rigid packaging items witnessed robust growth of 24.9 per cent, 11.9 per cent and 10.4 per cent, respectively, over the same period last year. 

In June 2024 alone, exports of plastics and linoleum reached USD 980.8 million, with notable gains in medical plastics, fibre-reinforced plastic (FRP) and composites, packaging materials and floor coverings. The Plastic Export Promotion Council has set an ambitious target of increasing plastic exports to USD 25 billion by 2027. To support this, the government is developing 10 plastic parks nationwide, with six parks already approved in states such as Madhya Pradesh, Assam and Tamil Nadu. These parks aim to boost manufacturing capabilities, promote sustainable practices and generate employment. 

Projects under this initiative receive up to 50 per cent funding or a maximum of ₹40 crore (USD 5 million). Additionally, government programmes like ‘Digital India’, ‘Make in India’ and ‘Skill India’ are geared towards reducing reliance on imports and fostering domestic manufacturing. Several centres of excellence have been established to enhance research and innovation in petrochemicals and polymers, while 23 CIPET centres are promoting skill development within the chemicals and petrochemicals sector. These initiatives, coupled with the rising adoption of plastic products, position the sector as a key growth engine for India’s economy 

Power
Moving Forward as a Formidable Force 

I ndia’s power sector sits at the heart of the nation’s infrastructure, propelling economic progress and enhancing citizen wellbeing. The government has placed universal access to affordable and sustainable energy at the forefront of its agenda, driving significant advancements in recent years. India’s power generation portfolio boasts a diverse mix of conventional sources like coal, gas and nuclear, alongside a growing presence of renewable options like solar, wind and hydropower. India is the third-largest producer and consumer of electricity worldwide, with an installed power capacity of 446.18 GW as of June 30, 2024. 

As of October 2024, the country had an installed capacity exceeding 454 GW. Renewable energy contributes significantly to this capacity, accounting for over 44.72 per cent. Solar and wind alone boast impressive installed capacities of 92.03 GW and 47.67 GW, respectively. Power generation increased by 7.17 per cent to reach 1,734 billion kWh in FY24 from 1,618 billion kWh in FY23. In FY25 till October 2024, India generated over 1,097 billion kWh. The National Electricity 

Plan 2022-32 estimates a total requirement of ₹33 lakh crore (USD 400 billion) and 3.78 million skilled professionals by 2032 to meet the rising energy demands. 

As of October 2024, projects in the pipeline have a potential capacity of over 213 GW in India. The government remains actively involved in the sector’s growth, implementing policies and initiatives to facilitate its development. The Union Budget of 2024-25 allocated ₹191 billion for the Ministry of New and Renewable Energy. Indeed, energy transition has been high on the agenda and policy measures have been undertaken to expedite the transition away from fossil fuels for a cleaner and greener future. India has already committed to generating 500 GW of renewable energy by 2030. 

Financials
Companies engaged in the power sector have a total market capitalisation of approximately ₹1,588,250 crore which is contributed by the top 10 listed entities. Our financial analysis of the power stocks shows that NTPC has the highest market capitalisation and revenue in H1FY25. Interestingly, Tata Power is the second-highest revenue contributor among the listed entities in the stock market. Tata Power has a market capitalisation to sales ratio of 2.16 times. The top 10 companies in terms of market capitalisation account for about 89 per cent and 79 per cent in terms of revenue. 

Among the top 10 power sector stocks, Adani Energy Solutions saw the highest YoY growth in revenue with 58 per cent while Adani Green stood second with an increase of 34 per cent. Based on PAT, Adani Green has shown the highest PAT margin with increase of 53 per cent and Torrent Power stands second with 39 per cent increase in PAT. Adani Energy Solutions stands as the worst performing stock with decrease in PAT by 189 per cent and Adani Power stands second with a decrease in PAT by 53 per cent. 

Outlook
In the current decade (2020-29), the Indian electricity sector is likely to witness a major transformation with respect to demand growth, energy mix and market operations. The government wants to ensure that everyone has reliable access to sufficient electricity at all times, while also accelerating the clean energy transition by lowering its reliance on dirty fossil fuels and moving toward more environmentally friendly, renewable sources of energy. Future investments will benefit from strong demand fundamentals, policy support and increasing government focus on infrastructure. 

The government also plans to set up 21 new nuclear power reactors with a total installed capacity of 15,700 MW by 2031. The Central Electricity Authority (CEA) estimates India’s power requirement to grow to reach 817 GW by 2030. Also, by 2029-30, CEA estimates that the share of renewable energy generation would increase from 18 per cent to 44 per cent, while that of thermal energy is expected to reduce from 78 per cent to 52 per cent. The government’s ambitious goal of achieving 500 GW renewable energy capacity by 2030 further underscores its commitment to this sector. 

The National Infrastructure Pipeline has allocated a whopping 24 per cent of its USD 1.4 trillion budget to the energy sector. This demonstrates the government’s prioritisation in terms of infrastructure development. Achieving this ambitious target will require addressing certain challenges. This includes grid integration of renewable energy, ensuring reliable and affordable power supply and developing a skilled workforce. Despite the challenges, India’s power sector stands on the precipice of a bright and sustainable future. 

Realty
Reaching for the Skies 

The real estate sector is one of the most globally recognised sectors. The growth of this sector is well-complemented by the growth in corporate environment and the demand for office space as well as urban and semi-urban accommodation. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. In India, the real estate sector is the second-highest employment generator, after the agriculture sector. It is also expected that this sector will attract more non-resident Indian (NRI) investment, both in the short term and the long term. Bengaluru is expected to be the most favoured property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun. 

Financials
The top five players in the realty sector by market capitalisation are DLF, Macrotech Developers, Godrej Properties, Oberoi Realty and Prestige Estates, which account for approximately 63 per cent of the sector’s total market capitalisation amounting ₹5,52,320.54 crore. In H1FY25, these companies collectively reported sales of ₹17,533.35 crore, reflecting a median growth rate of 28 per cent compared to ₹13,461.68 crore in H1FY24. 

Their combined EBITDA rose to ₹5,155.34 crore in H1FY25, a median growth of 46 per cent from ₹3,624.90 crore in H1FY24, while the PAT grew at a median rate of 51 per cent to ₹4,934.94 crore from ₹3,216.80 crore in the same period. The median EBITDA margins improved to 27.51 per cent in H1FY25, expanding by 401 basis points from 23.50 per cent in H1FY24. 

Similarly, the median PAT margins reached 34.26 per cent, up by 569 basis points from 28.57 per cent in H1FY24. Among the top 10 realty companies by market capitalisation, Signature Global (India), Macrotech Developers, Anant Raj, Godrej Properties and Oberoi Realty recorded the highest YoY sales growth during H1FY25. 

Outlook
The Indian real estate sector has diverged significantly from global trends. While advanced economies face declining housing sales due to higher interest rates and office and retail leasing challenges driven by layoffs and weak consumer sentiment, India has experienced robust housing demand and a recovery in office leasing, despite a global slowdown in IT and ITES spending. Additionally, retail real estate in India continues to thrive, supported by strong consumer spending. 

Near-term measures, including potential government incentives for first-time homebuyers and a possible interest rate cut by the RBI in the second half of FY25, could alleviate these challenges and stimulate demand. Over the next decade, Indian housing is expected to be both a driver and a beneficiary of GDP growth, with its contribution to GDP projected to rise from the current 7 per cent to mid-teens, aligning with trends in developed and mid-income nations. 

Long-term demand will be fuelled by several factors, including rising household income, with per capita income anticipated to grow from USD 2,000 to USD 5,000, rapid urbanisation leading to more urban than rural residents by 2047, nuclearization of families, increasing demand for independent housing, and a large, educated workforce, with approximately 1.5 million STEM graduates annually. These factors position the Indian real estate sector for sustained growth in the coming years. 

Retail
On a Shopping Spree 

The Indian retail industry stands as a cornerstone of the nation’s economy, showcasing remarkable dynamism and potential for sustainable growth. It accounts for 10 per cent of the country’s GDP and provides for 8 per cent of employment, according to IBEF. India is the fifth-largest global destination in retail and ranks 63rd in the World Bank’s Doing Business 2023 report, reflecting its business-friendly environment. Domestic factors like favourable demographics, urbanisation and rising incomes are driving the sector’s growth, 

With 60 per cent of its population below 35 and increasing female workforce participation, India’s consumption landscape is transforming. The urban population is expected to rise to 43 per cent by 2035, reshaping consumption patterns towards branded and organised retail. India ranks third globally in GDP in terms of purchasing power parity (PPP), with risingmiddle-class incomes and declining extreme poverty. Digital adoption is a game-changer, with 900 million smart phone users and 350 million online shoppers projected by FY27. 

E-commerce is set to reach USD 350 billion in gross merchandise value (GMV) by 2030, fuelled by government initiatives like 100 per cent foreign direct investment (FDI) in online retail and expanding infrastructure. The overall retail market, estimated at `93 trillion in FY24, is poised to grow at a CAGR of 10-11 per cent through 2028, reaching USD 2 trillion by 2032, according to a analysis by the Boston Consulting Group (BCG). 

E-retail grew 20 per cent in FY24, driven by increasing consumer trust and convenience. Fashion and lifestyle markets are also evolving, with private labels gaining traction. Modern trade and experiential retail are enriching customer engagement. 

Financials
The overall market capitalisation of the top retail stocks is ₹5,98,404 crore. The retail sector witnessed strong growth in H1FY25, with Trent Ltd. and V2 Retail Ltd. emerging as standout performers. Trent Ltd. reported a 47 per cent YoY increase in sales and a remarkable 94 per cent rise in profit, supported by improved operational efficiency and market penetration. V2 Retail Ltd. achieved the highest sales growth at 61 per cent and an extraordinary 2,569 per cent jump in profit, recovering from a low base, driven by aggressive expansion and cost control. 

Avenue Supermarts Ltd. maintained consistent growth with a 16 per cent increase in sales and a 12 per cent rise in profit, showcasing its resilient business model. Ethos Ltd. and Arvind Fashions Ltd. also delivered notable performances, with profit growth of 22 per cent and 81 per cent, respectively, despite modest revenue increases. While most companies improved margins, Shoppers Stop and Vaibhav Global faced challenges, reflecting sectoral headwinds. Overall, the sector demonstrated robust demand, with leading players leveraging scale and operational excellence to drive profitability. 

Outlook
India’s retail sector holds a positive long-term outlook, driven by rising incomes, urbanisation and evolving consumer preferences, despite a mixed performance in Q2FY25. The sector has seen strong growth in value retail, jewellery and luggage, while challenges persist in footwear and quick-service restaurants (QSR). Retailers are increasingly focusing on Tier II and III markets, leveraging digital channels to reduce costs and expand their customer base. Seamless omnichannel experiences integrating offline and online platforms will be crucial for competitiveness. 

Government-private sector collaboration is essential to address inflation, credit access and rural infrastructure development, fostering growth. Initiatives like a consumer sector council can drive innovation and operational efficiency. The consumer demand for premium, sustainable and personalised products opens opportunities for innovation and mergers. Companies like Trent Ltd. and Ethos Ltd. are capitalising on this trend through aggressive expansion and strategic partnerships. 

Trent Ltd.’s plan to open 30–40 Westside stores annually, including in Tier II and III cities, reflects its dual focus on physical and digital channels. Ethos Ltd. is enhancing its presence through new store openings and exclusive brand partnerships. However, the sector faces risks, including rising competition, online retail dominance, financing disruptions and supply chain interruptions. With a supportive policy framework and focus on digit innovation, India’s retail sector is poised for sustained growth and with sector projected to grow 9 per cent annually till 2030 according to Kearney. 

Telecom Sector
Profitability through Increasing Connectivity 

I ndia’s telecom industry is the second-largest in the world, with a subscriber base of 1.19 billion as of September 2024, including both wireless and wire-line connections. The country’s overall telecom density stands at 84.69 per cent, with the rural market’s telecom density at 58.48 per cent, presenting a large untapped opportunity, while the urban market has a higher telecom density of 131.86 per cent. As of September 2024, India has 944.40 million broadband connections, 4 million people employed in the sector, and over 125 million 5G user base. The number of 5G connections has reached 88 million, and the country boasts 100 smart cities. 

The telecom sector is the fourth-largest sector in terms of foreign direct investment (FDI), contributing 6 per cent to the country’s total FDI, and supports 2.2 million direct jobs and an additional 1.8 million indirect jobs. Looking ahead, 5G technology is expected to contribute around USD 450 billion to India’s economy between 2023 and 2040. Over the last decade, India has added over 500 million new smart phone users, and by 2026, the number of smart phone users is expected to reach 850 million, making up approximately 55 per cent of the total population. 

The Production Linked Incentive (PLI) scheme for telecom and networking products aims to boost domestic manufacturing and attract investments. The scheme has attracted $450 million in investment from 42 approved applicants, with an expected increase in sales of $32 billion. It is estimated to generate $30 billion in production and $25 billion in exports over the next five years. To expand broadband services, the PM-WANI initiative, launched in May 2022, offers public Wi-Fi through 2,384 hotspots at train stations. In August 2022, a new model was introduced to bring PM-WANI to rural areas through public-private partnerships. 

Financials In H1FY25, the telecom sector, including infrastructure, equipment and service providers, showed a mixed performance in year-on-year (YoY) sales growth. The median sales growth for the sector was 5.84 per cent, while the average sales growth spiked to 75 per cent, driven by extraordinary performances from a few companies. Tejas Networks led the sector with an impressive 650 per cent YoY sales growth, followed by ITI Ltd., which posted 280 per cent YoY growth, making them the top outperformers. However, not all companies fared well. Mahanagar Telephone Nigam Ltd. (MTNL) and Black Box Ltd. reported negative sales growth, highlighting challenges faced by some players in the industry. 

The period of H1FY25 showed steady improvement in profitability, with PBITDA margins displaying limited variation. The median PBITDA margin increased to 16.52 per cent, up from 14.77 per cent in H1FY24, while the average PBITDA margin rose to 17 per cent from 11 per cent, reflecting better operational efficiency. Profitability saw significant growth, with the sector’s average PAT growth at 116 per cent, driven by outliers like Tejas Networks, Bharti Airtel and Bondada Engineering, while the median PAT growth remained modest at 28 per cent. 

Outlook India’s telecom sector is expected to see strong growth in FY25, supported by recent tariff hikes. An ICRA report projects a 12-14 per cent rise in operating income this fiscal, a significant jump compared to the 8 per cent growth in FY24, which was impacted by the lack of tariff hikes and specific 5G plans. The average revenue per user (ARPU), which grew slowly in FY24, is likely to cross ₹200 in FY25 due to the recent price increases. The industry’s total revenue is estimated at ₹3.2-3.3 lakh crore, with EBITDA forecasted at ₹1.6-1.7 lakh crore. 

These tariff revisions could add ₹20,000 crore to the sector’s operating profit as they take effect. At the same time, the sector faces obstacles like limited use cases for 5G, high device costs and inadequate fibre installations. Despite these challenges, companies made large 5G investments in FY24 and FY25, which is expected to ease going forward as the spending levels stabilise. The telecom industry is set to spend `3 lakh crore on capital expenditure over the next 4-5 years, which will keep the debt levels high. 

The total debt is expected to rise slightly to ₹6.6 lakh crore by March 2025, compared to ₹6.5 lakh crore in March 2024, before starting to decline. The debt-to-EBITDA ratio is projected to improve to 3.9-4.0 times in FY25, indicating better financial health. With tariff hikes and a focus on monetising 5G, the sector is positioned for steady growth, despite ongoing challenges like high costs and debt levels. In addition, the increasing penetration of the internet into rural areas will benefit the telecom sector with a rising demand for smart phones and connectivity. 

Textiles
Yet to Weave a Success Story 

The Indian textile sector is one of the largest contributors to the global textile market, renowned for its diverse range of products from traditional hand-woven fabrics to advanced technical textiles. India holds a dominant position as the second-largest exporter of textiles and apparel globally. With its vast and integrated value chain, it contributes about 2.3 per cent to India’s GDP and accounts for over 12 per cent of the total export earnings. 

Employing over 45 million people directly and 100 million indirectly, the textile sector is one of the largest employment generators in India, supporting both rural and urban livelihoods. It plays a vital role in empowering women, with a significant female workforce in garment production. The industry, valued at around USD 223 billion in 2023, is projected to grow at a CAGR of 10-12 per cent over the next five years, driven by robust domestic consumption and export demand. 

Its key segments include cotton, silk, wool, synthetic fibres, jute and technical textiles. The sector caters to various activities, from raw material production (cotton, silk, jute) to manufacturing and retail. India’s government initiatives like the Production-Linked Incentive (PLI) scheme and focus on technical textiles position the sector for enhanced global competitiveness and sustainable growth. 

Financials
In recent years, China’s dumping strategy, backed by subsidies and overproduction, has disrupted the global markets. Despite India’s anti-dumping measures, Chinese textile imports surged 

significantly during FY 2000-2024, pressuring domestic players and weakening investor confidence in the textile sector. The textile industry experienced a notable turnaround in Q2FY25. Based on the performance of the top 30 BSE-listed textile companies by market capitalisation, we find that its aggregate revenue surged 11 per cent year-on-year. 

The net profit climbed 31 per cent during the quarter. For H1FY25, the revenue showed marginal growth compared to H1FY24, primarily due to the limited recovery of leading players, who continued to grapple with the effects of China’s dumping practices. In contrast, small-cap companies demonstrated robust top-line and bottom-line growth, contributing to an overall 20 per cent rise in net profit for the H1FY25 period compared to H1FY24. 

Gokaldas Exports and Kitex Garments emerged as the top performers in revenue growth, posting impressive double-digit gains. On the other hand, Alok Industries reported a steep revenue decline of over 30 per cent, marking it as the weakest performer. In terms of profitability, Ganesha Ecosphere, Bombay Dyeing and Manufacturing and Kitex Garments stood out with exceptional triple-digit net profit growth, underscoring their strong operational performance during this period. 

Outlook
The China-Bangladesh-US dynamic plays a pivotal role in shaping global textile trade. China, as the world’s largest textile producer and exporter, has long dominated the industry with its cost efficiency and robust supply chain. However, rising labour costs, stricter environmental regulations and escalating US-China trade tensions are driving a transformation. China’s pivot toward high-tech and technical textiles is also reshaping its traditional role. 

Meanwhile, Bangladesh, a major player in garment manufacturing, faces significant hurdles due to its economic crisis, marked by political instability, energy shortages and inflation. These disruptions have led global buyers to diversify sourcing bases, creating an opportunity for India under the ‘China Plus One’ strategy. With a strong textile infrastructure, diverse product offerings and raw material capabilities, India is well-positioned to benefit. However, challenges like logistics inefficiencies and high raw material costs need addressing to capitalise on this shift. 

With geopolitical shifts, including the possible resurgence of the China Plus One strategy, India could see opportunities or face risks like increased Chinese dumping practices. Key factors such as the US government’s stance on the China Plus One policy, evolving global trade relations, potential stricter anti-dumping measures by the Indian government, and the financial performance of companies in Q3FY25 —a critical quarter due to significant festive season demand—will play a pivotal role in shaping the industry’s future. 

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