While the 24 per cent contraction in the June quarter of last year due to the national lockdown had a major role in the 20 per cent growth this time around, analysts were upbeat about the pickup in consumption and construction sectors during the June quarter.
“Visibility of revival in consumer demand increases with household consumption up by 19 per cent, compared to contraction in FY21. Pick-up in construction by 68 per cent also shows signs of green shoots,” said Naveen Kulkarni, chief investment officer at Axis Securities.
Prior to the announcement of GDP numbers today, the benchmark equity indices closed at their lifetime highs aided by strong buying from foreign portfolio investors and optimism for future corporate earnings growth among investors.
Investors will also point to the sharp rise in daily vaccination rate in the country as India administered more than 10 million COVID-19 jabs for the second straight day. With nearly 50 per cent of the adult population now jabbed at least once and seroprevalence studies showing high number of antibodies against COVID-19 among citizens, optimism is rising that the impending third wave may be milder than expected earlier.
Analysts said that a mild third wave will allow state governments to continue on the reopening path and keep restrictions limited in the eventuality of the third wave hitting the country later this year.
Investors in the infrastructure sector will be pleased to see the strong rebound in construction in the country, which bodes well for several companies involved in the space, said analysts.
“The overall trend of the market remains positive led by the opening up of the economy, improving economic data points and pickup in vaccinations. Hence, investors can take advantage of the current volatility and build their positions from the medium to long term perspective,” said Siddhartha Khemka, head of retail research at