India's Economic Activity Remains Sluggish; Weak Start To Festive Season: Nirmal Bang

Nirmal Bang Report

India's economic activity largely remains sluggish. Most indicators remained flat or slowed down from the previous fortnight and were below their six-month average run rate except UPI payments.

The use of credit cards for E-commerce transactions improved from the previous fortnight, but remained below the 6-month average run rate.  The All-India monsoon surplus stood at 5%.

Rainfall deficit shrunk in Haryana and stood at 4% whereas in Punjab the deficit remained elevated at 27%. Rainfall deficit in UP and Bihar stood at 6% and 28% respectively. All-India reservoir levels are 18% above normal, but the Northern region is still facing a deficit of 17%.

As of September 13, Kharif acreage was up 2.2% YoY. Supported by a good monsoon, lower inflation and festive stocking, FMCG companies are seeing signs of rural rival. Bizom estimates that rural & semi-urban sales were up by 16%YoY in August (on a low base) while urban was up by 8%.

Our channel checks suggest a tepid start to the festive season, particularly for consumer durables, with premium products still driving sales. Media companies are however upbeat on higher festive ad-spends driven by the premium segment.

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