Key Highlights
- According to the World Economic Outlook, India’s real GDP is expected to grow by 7.3% in 2025, supported by stronger-than-expected performance in the third quarter and continued momentum in the fourth quarter. The outlook remains steady amid global uncertainty, requiring caution, but not pessimism.
- Market capitalization in the construction and engineering industry decreased by 14.1% between Q2 and Q4 CY25. Prolonged monsoon conditions slowed construction, while the shift to Stage V emission norms increased equipment costs and delayed purchases. Cautious spending due to global uncertainty and tighter financing further softened demand, contributing to the overall slowdown.
- Market capitalization of companies in the chemicals industry decreased by 14.2% from Q2 CY25 to Q4 CY25. India’s chemical sector is facing pressure from China’s overcapacity which continues to depress global prices, weak demand in the U.S. and Europe and declining exports. Regulatory delays, infrastructure constraints, and low R&D intensity further constrain India’s competitiveness and slow industry growth.
- Market capitalization of companies in the machinery industry decreased by 3.5% from Q2 to Q4 CY25. India’s machinery sector experienced a slowdown as industrial growth weakened, with the Index of Industrial Production (IIP) dropping to 0.4% in October 2025. Decline was most evident in the mining and electricity generation segments, driven by an extended monsoon and cooler temperatures that reduced power demand across several states.
- Market capitalization of companies in the capital markets decreased by 5.8% from Q2 to Q4 CY25. This decline was driven by SEBI’s new mutual fund rules which removed the 5 bps fee and tightened overall expense limits. These changes have reduced AMC revenues, raising concerns over lower margins, higher compliance costs, and softer profitability across the sector.
