The Indian economy is expected to grow at 6.7-6.9 percent in the December quarter of FY24, compared to 7.6 percent in the second quarter due to poor farm sector performance, according to an SBI Research released on Wednesday.
The report is issued one day before the announcement of official GDP figures for the third quarter of the fiscal year 2023-24.
India maintained its position as the world's fastest-growing major economy, with GDP rising at a faster-than-expected rate of 7.6 percent in the September quarter, boosted by government expenditure and manufacturing.
SBI Research's 6.7-6.9 percent growth forecast is lower than the Reserve Bank's 7% growth projection for the quarter. SBI Research forecasts Q4 GDP at 6.8 percent.
According to SBI Research, the main reason for the reduced growth prediction is the farm sector's poor performance, which, with the exception of fisheries, affects the entire sector.
According to preliminary predictions, major kharif crop production in 2023-24 is expected to be 148.5 million tonnes, 4.6% lower than the previous year.
While the sowing season for rabi crops shows a little gain in overall acreage compared to the previous year, there are concerns about the seeded area for cereals, which fell 6.5% from the previous year, the study noted.
While agriculture may experience some moderation if rabi output does not compensate for the kharif shortfall, value added in agriculture would fall, it noted.
Corporate results for Q3FY24, as reported by over 4,000 listed organizations, reveal a significant growth of more than 30% in PAT, while topline growth was around 7% compared to Q3FY23.
Furthermore, listed organizations reported improved margins, as seen by the results of around 3,000 companies ex-BFSI (banking, financial services, and insurance), with margins of 14.95 percent in Q3 compared to around 12 percent in the same period last year.
Corporate Gross Value Added (GVA), as measured by operating profit plus staff expenses, increased by around 26% year on year in the third quarter.
