While India’s recovery from the pandemic lows was slow to begin with relative to other developed economies, we have witnessed a strong acceleration over the past few months led by manufacturing with the PMI reading of 58.9 for October being the highest since mid 2008. Similarly cement and steel production data also point to improvement in the core industrial sectors. While manufacturing has led the rebound growth in the services sector has been relatively muted so far. However services PMI reading of 54.1 for the month of October is the first reading above 50 since March and points to green shoots of recovery for the services sector. We expect the economic recovery to continue from here on led by continued acceleration in the services sector. While we see continued momentum in cyclical sectors like auto and cement we also expect that sectors with strong revenue visibility like agrochemical, IT and pharmaceuticals will continue to do well.

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