Invest Guide July 2025

Dear Investors,

As we step into the second quarter of FY2025-26, the Indian economy continues to present a balanced picture of resilience and opportunity. While domestic indicators remain encouraging, global uncertainties persist, demanding both cautious navigation and strategic positioning. Amid these dynamics, our focus remains firmly on creating long-term value for our investors. Here's a look at the key developments and outlook ahead.

Economic Growth and Inflation Trends -

India's economy is off to a solid start in FY26. The final GDP figures for FY25-26 showed growth at 6.5%. reflecting underlying strength. High-frequency indicators, especially manufacturing PMI, indicate continued expansion in industrial activity, underpinned by strong demand and output momentum.

Consumer Price Inflation (CPI) has moderated meaningfully, coming down to just over 3% in April - the lowest in nearly two years. The easing of food prices and a favourable base effect have contributed significantly. The outlook for inflation remains benign, particularly with a forecast of a normal-to-above-normal monsoon. This should support rural consumption and keep food inflation in check, offering an added tailwind to growth.

RBI's Monetary Easing -

Taking advantage of the favourable inflation outlook, the Reserve Bank of India has shifted to an neutral stance. The repo rate has been reduced by 100 bps, now at 5.5%, to spur credit growth and economic activity. Banking sector lending rates are declining, promising lower financing costs for consumers and corporates alike. This dovish policy aligns well with ongoing government infrastructure initiatives and should support private-sector investment revival.

FII & DII Activity -

Foreign Institutional Investors (FIIs) became net buyers of Indian equities in Q1 FY26, reversing earlier heavy outflows—₹87,000 crore in January and ₹59,000 crore in February. Improved valuations, stable global yields, and India's economic resilience attracted over ₹15,000 crore in FII inflows across April to June.

Key sectors like capital goods and real estate saw notable interest. Meanwhile, Domestic Institutional Investors (DIIs) continued strong support, investing ₹28,228 crore in April and ₹67,642 crore in May. Backed by record SIP inflows and pension allocations, DIIs helped stabilize markets during volatility. This combined FII-DII participation drove a 9-10% recovery in the Nifty 50, reflecting renewed investor confidence and reinforcing India's long-term growth story.