Indian Economy Grew 7.4% in Q4 FY24; 8% in FY24: SBI Research Report

The Indian economy showcased robust growth, with a GDP increase of 7.4% in Q4 FY24 and an overall 8% growth for the fiscal year FY24, according to an SBI Research report. This announcement comes ahead of the official GDP figures release by the Centre on May 31 for Q4 FY24 and the provisional estimates for FY24. The Reserve Bank of India (RBI) estimated Q4 FY24 real GDP growth at 7.3%, with expectations for Q1 FY25 at 7.5%, and full-year FY25 growth projected at 7.0%. Chief Economic Adviser V. Anantha Nageswaran also indicated a high possibility of India’s economic growth touching 8% in FY24.

Urban and Rural Economic Indicators

SBI Research highlighted a secular growth trend across both urban and rural landscapes. Since January 2024, over 80% of leading indicators showed acceleration, particularly in urban areas. Indicators such as passenger vehicle sales, airport passenger traffic, GST collection, credit card transactions, petroleum consumption, and toll collections pointed to increasing urban economic momentum. The rural economy also showed positive signs, with the percentage of accelerating indicators rising to 75% in March 2024 from 56% in February 2024. Key indicators such as diesel consumption and two-wheeler sales are on the rise, reflecting growing rural economic activity.

Corporate Performance

In Q4 FY24, around 2,400 listed entities reported a top-line growth of 9%, while EBIDTA grew by approximately 21%, compared to a flat top line in previous quarters. However, PAT growth decreased to 12% from 42% in the preceding two quarters on a year-over-year basis. The report noted that an ‘above normal’ monsoon is expected to benefit the rural economy by boosting domestic supplies of pulses, oilseeds, and cereals. Corporate GVA grew by around 18% in Q4 FY24, compared to 20% in Q4 FY23 and 26% in Q3 FY24, with EBIDTA growth marginally reducing to 21% from 26% in the previous quarter. Sectors such as Banking, Automobile, Capital Goods, Consumer Durables, and Pharma reported strong performance during the quarter.

GDP Growth & Global Outlook

The report emphasized that global growth remains resilient, with easing inflationary pressures and tight employment conditions despite geopolitical and extreme weather event risks. Global headline inflation is expected to decrease from an annual average of 6.8% in 2023 to 5.9% in 2024 and further to 4.5% in 2025, with advanced economies (AEs) returning to their inflation targets sooner than emerging market and developing economies (EMDEs).

Projections and Expert Opinions

Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, noted strong performance across various sectors, including trade and hotels, and robust manufacturing activities, with expectations of 6.1% GDP growth for Q4, leading to an annual GDP growth close to 7.6%. DK Srivastava, Chief Policy Advisor at EY India, mentioned that both domestic and international institutions predict around 7% growth for India in FY25, with Q4 FY24 GDP growth potentially exceeding 6.5%, resulting in annual growth close to 7.8%, as projected by the IMF. India Ratings & Research forecasted a GDP growth rate of 6.2% for Q4 FY24, while ICRA predicted a deceleration to 6.7% for the same period, projecting overall GDP growth of 7.8% for FY24.