Indian Economy share price target

September 2023 saw a contraction in Wholesale Price Index (WPI) inflation, and a fall in Consumer Price Index (CPI) inflation. The unemployment rate fell to a one-year low, while Foreign Institutional Investment (FII) reported an outflow. Crude oil prices rose, and consumption decreased. Service PMI and manufacturing PMI indicated growth during September.

Capital Expenditure (capex) substantially augments the economy's productive capacity and exerts a more profound influence on long-term growth and productivity in contrast to revenue expenditure

India’s merchandise exports contracted a modest 2.6% YoY in Sep’23, and Aug’23’s initially-reported 6.9% YoY decline in exports was revised up to growth of +3.9% YoY. Consequently, India’s goods exports declined a modest 2.9% YoY in Jul-Sep’23 (while China’s exports declined 9.6% YoY and South Korea’s 9.3% YoY during the quarter). Goods imports declined 15% YoY in Sep’23, and 11.6% YoY in Q2FY24, and the quarterly goods trade deficit declined 23.9% YoY.

Credit growth remains healthy; deposit growth picks up pace

The great hope of the Indian government’s much-celebrated Production Linked Incentive (PLI) schemes is to build powerful, globally competitive businesses across Indian industries Launched as part of the Atmanirbhar Bharat campaign, the PLI scheme hopes to make India a manufacturing powerhouse, through incentives for sales of domestically manufactured products.

Over the past 20 years, India’s ‘investment rate’, real estate and corporate profits have been through the niches and recesses of economic cycles – one full upcycle (2003–2010), followed by a full down cycle (2011–2020) and the emergence of the most recent upcycle post-FY21.

August 2023 saw mixed macroeconomic changes. Wholesale Price Index (WPI) inflation contracted, and Consumer Price Index (CPI) inflation fell. The unemployment rate rose marginally, while Foreign Institutional Investment (FII) inflows decreased. Crude oil prices and consumption increased.

Goods exports declined 6.8% YoY in Aug’23, the best performance in 5 months, as engineering exports (+7.7% YoY) ended a year-long slump, and cotton textiles (+26% YoY) grew almost as fast as the long-term stellar performer, electronics (26.3% YoY).