Mr. Dhiraj Relli, MD & CEO, HDFC Securities on the Q2 GDP Numbers:
"The Q2 GDP numbers came in at a big positive surprise. Though Agriculture and Services numbers came in a little below expectations, Manufacturing growth has come in much stronger than expected. This will entail revising downward the full year GDP contraction forecasts. The key thing to watch out for is the time services will take to come back to normal and whether manufacturing growth reflects restocking/pentup demand or is reflective of normal demand conditions which have revived sustainably. Equity markets could open higher on Tuesday reflecting the positivity of the Q2 GDP numbers."
Mr. Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on GDP Numbers:
"The significantly lower YoY contraction in Q2GDP at 7.5% vis-à-vis 23.9% in Q1 has been largely in line with our expectations given the effect of pent up demand in the economy after a protracted lockdown in large parts of the country. The agriculture sector continues its good run with 3.4% growth and the manufacturing sector has also slightly surprised with a growth of 0.6%. Further, the electricity sector has shown a healthy trajectory with 4.4% growth mainly due to a pickup in household demand and nationwide electrification. However, the services sector continued to witness significant challenges at -11.4% YoY particularly in financial services and in segments such as retail, hospitality and tourism. What has really supported the GVA/GDP in Q2 is the performance of the private sector which has recorded moderate earnings growth through significant cost optimisation despite the pandemic related challenges and slowdown in revenues. Going forward, however, we believe that the revival momentum in Q3/Q4 will be critically dependent on the pickup in private consumption during the festive season and a reduction in the intensity of the Covid pandemic. Any further resurgence of the pandemic and the delay in the introduction of the vaccines may constrain the expected GDP growth in Q3/Q4."