India Q1 GDP Review - Growth At 6.7% - Some Signs Of Cyclical Moderation: Nirmal Bang

Nirmal Bang Report

Gross domestic product growth for Q1 FY25 stood at 6.7% YoY (Bloomberg consensus: 6.8%; our estimate 6.2%). Gross value added growth stood at 6.8% YoY (Bloomberg consensus: 6.4%; our estimate: 6%). Nominal GDP grew by 9.7% YoY in Q1 FY25 versus 9.9% YoY in Q4 FY24 and 8.5% YoY in Q1 FY24.

Core GVA growth was steady at 7.3% YoY in Q1 FY25, unchanged from Q4 FY24. The major surprise against our estimate was led by Industry (excluding construction), which grew by 7.4% YoY (estimate: 5.6%) on the back of the manufacturing sector.

Services (including construction) grew by 7.7% YoY (estimate: 7.1%), led by construction and Public Administration, defence and other services.

Private Financial Consumption Expenditure grew by 7.4% YoY in Q1 FY25 versus 4% YoY in Q4 FY24 and 5.5% YoY in Q1 FY24, likely supported by an election bonanza. Gross Fixed Capital Expenditure stood at 34.9% of GDP in Q1 FY25 versus 33.2% in Q4 FY24 and 34.3% in Q1 FY24, likely supported by private investment.

Although, growth remains resilient, we believe that there are signs of cyclical moderation, with GDP growth largely in sync with the long term trend.

We have maintained our FY25 GDP forecast at 6.6% while marginally raising GVA forecast to 6.5% after factoring in Q1 FY25 numbers.

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