Sector Updates

Textile companies are focusing on diversification as risk mitigating strategy with focus on diversifying the production base in other countries and improve the regional mix and not to depend on single country/region in the near future....

In August, Consumer Price Index (CPI) inflation rose to 2.1%, while Wholesale Price Index (WPI) inflation reached a four-month high of 0.5%. Food-driven pressures surfaced even as core inflation remained stable, and most of the CPI basket stayed below 4%.

CLSA highlights that inflation in over 70% of the CPI basket has fallen below 4%, marking a record low. The brokerage expects vegetable deflation to persist through November, keeping headline inflation in the 1–2% range before it edges up toward 4% by early 2026. It anticipates the RBI will hold rates in October but may leave room for a cut in December.

The month of August, like the month gone by, continued to be volatile as ever. From our coverage universe, Methanol registered the highest price spurt of 14% MoM. This has been on the back of a recent US clamp down on Iran origin imports. This has led to a supply shortage in the West, while the capacities run in full swing. The prices for methanol are expected to stay elevated in the near term, even as the demand stays lackluster. Indian players (except the ones sanctioned due to Iran origin) stand on solid ground as Chinese excessive supply has led to Chinese Methanol prices melting. TDI prices, which had declined by...

India’s life insurance industry saw a decline in new business premiums in August 2025, with total collections declining by 5.2% YoY to INR 309.6bn compared to INR 326.4bn in August 2024.

During Aug-25, Indian steel prices remained flat MoM at Rs49,500/tonne, while Chinese steel rose by 2% MoM to $500/tonne due to government-led production cuts and anticipation of further output restrictions. Coking coal prices increased by 5% MoM to $155/tonne, driven by supply-side disruptions amid the monsoon. In Jul-25, Indian steel production rose by 3% MoM to 14 mn tonnes. Estimated Chinese steel output declined by 4% MoM to 80 mn tonnes, while global steel production contracted by 1% MoM to 150 mn tonnes. Chinese steel exports increased by 2% MoM and 26% YoY to 9.8 mn tonnes, driven by weak domestic...

Indian HRC: Indian HRC prices remained flat WoW to Rs 49,500/tonne, as market participants adopt wait and watch approach to gain further price clarity for September. Billet-Ex-Raipur: Billet prices increased by 1.6% WoW to Rs 37,200/tonne, supported by positive sentiment spill-over from GST 2.0 reforms, boosting steel demand from consuming industries. Chinese HRC: Chinese HRC prices decreased by 1.0% WoW to Rs 41,857/tonne, driven by concerns of potential domestic oversupply...

GST provides much needed fillip to the market

Government has announced GST 2.0 reforms which aims to rationalize the current multi-slab structure into a simpler framework, with two main rates of 5% and 18%, and a higher 40% slab for luxury and sin goods. For the auto sector, this overhaul...

In our monthly Hotels update we have summarized key events of the domestic hotel industry, new hotels signing/addition by key players during the month and pricing trend of key cities for August, 2025. We have analyzed pricing of 171 hotels with ~33,000 keys across 8 cities to understand the trend over last 24 months (Exhibit 1-8). The industry had another month of ADR improvement on both YoY as well as MoM in key selected markets. We anticipate further strengthening of ADR aided by festive season followed by wedding season. We remain positive on domestic hospitality space led by demand-supply mismatch, FTA, increased corporate travel, and MICE will aid...

Event Update: GST Reform 2.0

India’s auto sales in August 2025 reflected a broadly mixed trend across segments. The industry’s domestic retail performance softened as consumers deferred purchases in anticipation of potential GST cuts

OEM wholesale sales volume for August 2025 came in healthy with 2W & tractor segments outperforming its peers. Notably, exports continue to stage a healthy growth on YoY basis for most of the OEMs. CV space reported healthy volume prints for the month of August 2025 with green shoots of recovery visible in the LCV segment. Maruti performed better than the peers in PV segment while Royal Enfield (Eicher motors) lead the growth charge in 2W domain. M&M continues to decisively dominate the...

We prefer TVS Motors, Hero Motocorp, and Bajaj Auto in 2Ws (Eicher seems fully valued at CMP); M&M (non-coverage) as a play in the PV/LCV/tractor segment, followed by Maruti in PVs. We also like Ashok Leyland in the CV space, followed by a close watch on Eicher (VECV) for any market share gains.

Total sales volumes remained largely flat at 1,80,683 units (-0.6% YoY, +0.1% MoM), as domestic weakness continued to weigh on overall growth, partly offset by resilient exports and steady LCV demand.

Banking sector (non-food) credit growth remains muted in July'25 at ~0.1% MoM (9.9% YoY) vs ~1.1% MoM (9.3% YoY) in June'25. The latest sectoral deployment data showed that credit growth is muted in agri, industry and services sectors, Agri loans (yoy) growth was 7.3% in July'25 vs 6.8% in June'25. Loans to industries yoy growth increased to 6.1% in July'25 vs 5.5% in June'25. Services sector growth increased to 11.1% vs 9.0% YoY in June'25. Growth in loans to NBFCs moderated to 2.6% YoY in July'25 vs 2.6% YoY in June'25. However, loan to retail segment slightly moderated to ~11.4% YoY in July'25 vs 12.1% in June'25. Unsecured loan portfolio...

India’s real GDP growth surprised positively as it accelerated to 7.8% YoY in 1QFY26 (highest in five quarters), up from 6.5% in 1QFY25 and well above our expectations of 6.5% (Exhibit 1).

The proposed GST rate rationalization has created uncertainty among consumers, leading to the postponement of purchase decisions, most noticeably in the PV segment, and to a lesser extent in 2Ws.

With a strong start to FY26, the Indian hospitality industry is well poised to continue its growth momentum, with healthy RevPAR growth in FY26.