Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on Q3FY21 GDP

The Q3GDP of 0.4% is in line with our forecasts and reinforces our expectations on the ongoing economic revival in India. It also formally marks the end of the recessionary environment triggered by the global pandemic. Private consumption has grown strongly on a QoQ basis by 18.5% in Q3 and is lower by only 2.3% compared to that in Q3FY20. What is encouraging is the YoY growth in gross fixed capital formation by 2.58% which implies that the focus on enhanced capital expenditure by the government has started to yield dividends. This is further reinforced by the healthy growth in construction GVA of 6.2% and 21.9% on a YoY and QoQ basis respectively. It is heartening to note that the trade, hospitality and transport segment GVA which has been the most affected due to lack of mobility, has grown by 13.1% on a QoQ basis and has exceeded over 90% of that in the previous year, reflecting the improvement in mobility indicators. The momentum in the manufacturing sector is however, a bit of concern; while manufacturing GVA has moved back to positive territory, growing 1.6% on a YoY basis, it has partly benefited from a lower base in the previous year.

Source : Equity Bulls

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