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OCTOBER 2025

Consumer Durables growth slowed compared to previous
quarters but remained healthy at 10.7 per cent, though PAT
margins came under pressure, averaging 6.0 per cent in the
past three quarters. Textiles also registered double-digit
growth in net sales (12.4 per cent in Q1FY25 and 11.6 per cent
in Q4FY25), signalling a revival in discretionary consumption.
Given its significant exposure to the US market, the external
demand for the textiles sector is expected to face challenges
in the coming quarters.

Industrial sectors showed divergent trends. Net sales of
Capital Goods grew by 10.2 per cent in the first quarter on the
back of government’s sustained public capex and
infrastructure push, though margins fell to 11.7 per cent from
18.1 per cent in the previous quarter. However, Industrial
Items, which include items like accessories for machinery,
items of plastics, cables, glass items, etc., recorded a
deceleration in sales growth to 2.1 per cent in the reporting
quarter from 9.6 per cent in the last quarter.

Industrial commodity-linked sectors such as Metals & Mining,
Chemicals, and Utilities witnessed weaker momentum in their
net sales growth in the first quarter. Metals and Mining
recorded a modest net sales growth of 2.3 per cent, reflecting Service sectors have maintained momentum, with the net
global price softness and early advent of monsoons, though it sales of the Hospitality sector growing by a healthy 24.7 per
maintained its net margins at 12.7 per cent. The Chemical cent on year-on-year basis, supported by high occupancy and
sector’s net sales growth slowed to 6.6 per cent in Q1FY26 room rates amid buoyant domestic travel demand. Topline of
from 10.4 per cent in the previous quarter, though margins IT & ITeS sector grew modestly by 5.7 per cent in the reporting
remained stable at 10.2 per cent. Utilities sales contracted by quarter as exports of this sector faced global headwinds but
2.3 per cent, compared to 2.4 per cent growth in the previous continued to maintain healthy margins at 18.5 per cent.
quarter and 19.4 per cent in the same quarter last year,
reflecting lower power generation and realisations.
The near-term outlook remains favourable
Topline of Construction and Real Estate sector maintained a
steady sales growth at 6.9 per cent in the first quarter, almost amid subdued inflation, lower interest rates,
matching the 7.1 per cent rise seen in the previous quarter, but and tax cut reforms
profit margins slowed marginally to 8.9 per cent from 9.7 per
cent in the comparable period. The early onset of the
monsoon, which normally leads to the stalling of construction Looking ahead, the Q1FY26 performance of the corporate
activities, is likely to have contributed to the subdued sector signals resilience in the face of evolving global and
performance of the sector in the reporting quarter. Conversely, domestic dynamics. While sales growth has softened, the
net sales of Construction Materials sector, continued its improvement in profitability metrics, supported by benign input
upward trajectory, growing by 7.5 per cent in Q1FY26 as costs and operational efficiencies, bodes well for corporate
compared to 5.0 per cent in Q4FY25, after three consecutive balance sheets. With inflation under control, interest rates on a
quarters of contraction. downward trajectory, and consumption expected to pick up on
the back of recent GST and income tax rationalisation, the
Healthcare-linked sectors performed strongly in the April-June outlook for the coming quarters remains favourable. That said,
quarter. Pharmaceuticals recorded healthy 10.7 per cent net persistent global uncertainties, including trade and tariff
sales growth and remained the most profitable sector with a frictions, uneven recovery across major economies, and
net margin of 22.5 per cent, driven by robust exports and volatility in commodity and financial markets, could weigh on
steady domestic demand. Healthcare sector also posted external demand and input price stability. The next phase of
strong net sales growth of 15.8 per cent, supported by high corporate growth will likely hinge on a broad-based revival in
hospital occupancy rates and strong diagnostic volumes. demand and the continued strength of the investment cycle.

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